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Will a self-build mortgage cover VAT on kit house?


AnnaKH
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Hi, I've been mostly looking at companies who offer supply and erect service, which means I wouldn't have to pay the VAT on the kit. I've just started looking at kit supply only companies and want to know if a self-build mortgage would cover the VAT for our kit house? I know we can reclaim it back, but can we borrow on the cost inc VAT or only exc VAT? Thanks

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46 minutes ago, AnnaKH said:

Hi, I've been mostly looking at companies who offer supply and erect service, which means I wouldn't have to pay the VAT on the kit. I've just started looking at kit supply only companies and want to know if a self-build mortgage would cover the VAT for our kit house? I know we can reclaim it back, but can we borrow on the cost inc VAT or only exc VAT? Thanks

I would tell them no

and ask them to zero rate the kit

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1 hour ago, AnnaKH said:

Hi, I've been mostly looking at companies who offer supply and erect service, which means I wouldn't have to pay the VAT on the kit. I've just started looking at kit supply only companies and want to know if a self-build mortgage would cover the VAT for our kit house? I know we can reclaim it back, but can we borrow on the cost inc VAT or only exc VAT? Thanks

When you think about it the mortgage will be covering everything you buy which will be subject to vat anyway unless it’s supply and fit so I don’t see a problem with that, unfortunately kit firms can’t zero rate unless they are erecting it for you 

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+1

 

The amount they will lend is normally a percentage of what they think the finished house will be worth (not its cost to build), oh and your earnings/affordability.

 

 

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