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bigduckontax, Accountant
Category: Tax
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I want to build a new house in my garden . If on completion

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I want to build a new house in my garden . If on completion I rent it out can I still claim back VAT on cost of building materials.?
Hello, I am Keith, one of the experts on Just Answer, and pleased to be able to help you with your question. Yes, you can, but there are difficulties as I will explain. Rentals are exempt from VAT, but you can exercise an option to charge the tax at the standard rate. Tenants may jib at paying an additional 20% on their rents and you may find yourself non competitive in the market place. Of course if your tenants are themselves registered for the tax there is no problem. VAT can only be reclaimed in proportion to standard, reduced and zero rated supplies made. Exempt supplies do not count so you may well find that the input tax is irrecoverable as there are no taxable outputs available. I am so sorry to have to rain on your parade.
Customer: replied 1 year ago.
Can I claim VAT on new build materials if I rent new build house..
Yes, you can, but there are limitations as I explained in my original answer.
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