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Is VAT reclaimable even if you sell the property?


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The scheme is for self builders who intend to live in the house (see the notes from the claim form below). People who build with the intention of selling the house count as property developers, not self builders and are not eligible. 

 

 

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Types of new builds

You are eligible for this Scheme if you, for reasons other than business have constructed a new dwelling to be used either by you or your relatives as a family home for residential or holiday purposes 

 

You are not eligible to use this Scheme if you have constructed a property that, because of a condition in the Planning Permission (or similar permission such as a Planning Agreement), cannot be disposed of or used separately  

 

have constructed a property that either you, or your relatives, do not intend to live in yourselves but intend to sell or let out or use for any other business purpose – a business purpose also includes a dwelling built because you need to live where you work.

 

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3 minutes ago, Russell griffiths said:

Have you thought about capital gains tax. 

 

yes, ive def thought about that. Ive done my calculations and there will be  circa £8k VAT to reclaim, but to live there for 12 months so as not to upset the VAT man would cost more than i could claim back in VAT anyway. So then i have to factor in the CGT and see which is the best option

1 minute ago, Bitpipe said:

Aside from making the declaration in the form, how do they actually know ?

 

And how long do you need to live in it before selling ? A day, a year...?

 

theres no clear answer as far as i can see, all depends on what the tax man decides and if you choose to fight it

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7 minutes ago, Bitpipe said:

Aside from making the declaration in the form, how do they actually know ?

 

And how long do you need to live in it before selling ? A day, a year...?

 

I understand that it's 'intent'. If HMRC believe that you have developed the property to sell then you are not eligible, but you could move in, intend to live there forever and then your circumstances might change meaning that you have to sell the property. If they looked into the circumstances clearly a job move or similar would be adequate justification but to build another property of a similar size in a similar location might be a bit suspicious. Anyone could take a chance however. 

 

The real killer is CIL as if you have a self build exception you lose the exemption and the full charge is due if you move out within 3 years. No way round that one as far as I can see. 

 

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3 minutes ago, newhome said:

 

I understand that it's 'intent'. If HMRC believe that you have developed the property to sell then you are not eligible, but you could move in, intend to live there forever and then your circumstances might change meaning that you have to sell the property. If they looked into the circumstances clearly a job move or similar would be adequate justification but to build another property of a similar size in a similar location might be a bit suspicious. Anyone could take a chance however. 

 

The real killer is CIL as if you have a self build exception you lose the exemption and the full charge is due if you move out within 3 years. No way round that one as far as I can see. 

 

 

Thanks, yes i read that too. Of course the battle is to prove intent or not : )

 

and luckily theres no CIL here

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It all rests in weather the house is your main residence 

In theory you can register your utilities Then put it up for sale 

without capital gains 

But you couldn’t have your old house waiting to move back into 

 

My friend Finished building his so called forever home ? as we started ours Six months on he found an d en better plot and sold the house he had finished less than a year earlier 

He and his wife didn’t pay any capitol gains 

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Just now, nod said:

It all rests in weather the house is your main residence 

In theory you can register your utilities Then put it up for sale 

without capital gains 

But you couldn’t have your old house waiting to move back into 

 

My friend Finished building his so called forever home ? as we started ours Six months on he found an d en better plot and sold the house he had finished less than a year earlier 

He and his wife didn’t pay any capitol gains 

 

?

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2 minutes ago, nod said:

It all rests in weather the house is your main residence 

In theory you can register your utilities Then put it up for sale 

without capital gains 

But you couldn’t have your old house waiting to move back into 

 

My friend Finished building his so called forever home ? as we started ours Six months on he found an d en better plot and sold the house he had finished less than a year earlier 

He and his wife didn’t pay any capitol gains 

It was so funny 

All the way through his very stressful build He kept saying ‘They will have to carry me out of here in a box ‘ 
He’s now started all over again and bought a small place in Spain with the 400k he made from building in his back garden

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2 minutes ago, nod said:

It was so funny 

All the way through his very stressful build He kept saying ‘They will have to carry me out of here in a box ‘ 
He’s now started all over again and bought a small place in Spain with the 400k he made from building in his back garden

 lol, what a nice profit eh?

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26 minutes ago, SteamyTea said:

Was the 400k the change in circumstances?

Ha ha 

I think so He had quite a nice bungalow With a big land locked garden 

He had applied for planning for the last ten years 

The farm next door changed hands and needed to run a fresh power supply across his garden

Which granted in exchange for access to his BUILDING PLOT

Being a site manager and former  Brickie he built a 5 bed house for 120 k 

Pretty low 2m cost even lower if he counts the plot purchase price in ?

 

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