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VAT on Commercial Premises

Hi there,

I Formed a company and bought a commercial property for £370K and paid £72K VAT on it. Later on i registered for VAT and reclaimed VAT that i paid (72K). I have not claimed any other VAT amount paid on other invoices for services and purchases.

Now i would like to sell the building on, How does it work?
1. Can I opt out of VAT option and sell it without the buyer paying the VAT?
2. Do i have to pay the VAT i reclaimed in order to make the premises VAT free for buyer?
3. any other option that i have?

Pointing in the right direction will be much appreciated.

Kind regards




  • MindTheGAAPMindTheGAAP Registered Posts: 17
    Even if you sell the property (on which you have recovered VAT) after deregistration, it would be considered a taxable supply of property and you will then need to account for VAT on it at the open market value.

    As the property cost more than £250,000 it is covered by the capital goods scheme, so if you deregister for VAT within ten years of its purchase you will need to repay a proportion of the VAT reclaimed, rather than account for VAT on its current market value.

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