VAT on Land and Property
(Construction, Conversions, Land Sales and Options, Capital Goods Scheme)
Property-related VAT can be one of the most misunderstood areas of tax. Rules often vary by project type, intended use, ownership structure, and election to tax. At My Tax Consultants, we support businesses, developers, investors, and contractors with clear advice on applying VAT rules across a wide range of land and property transactions. We focus on helping clients make informed decisions that reduce the risk of costly VAT errors.
VAT on New Construction
When dealing with new builds, the VAT treatment depends on whether the project involves commercial or residential property. Residential new builds may qualify for zero-rating, but specific criteria must be met—particularly around planning permission and usage. Commercial projects typically attract standard-rate VAT, although exceptions exist based on intended end use and lease terms. Our team will review your construction plans and contracts to determine how VAT applies and ensure invoicing and recovery are correctly handled.
VAT and Property Conversions
Projects involving the conversion of non-residential buildings into dwellings can qualify for a reduced VAT rate of 5%, but only under certain conditions. We guide clients through what qualifies as a genuine conversion and help determine whether reduced-rate VAT is available. In addition to eligibility reviews, we assess documentation requirements and liaise with contractors to minimise disputes over incorrect VAT charges.
Land Sales and Options to Tax
Selling land or property without professional advice can result in unexpected VAT charges or missed recovery opportunities. The decision to exercise the option to tax can significantly impact both buyer and seller. We assist with all aspects of land sales, including:
- Reviewing whether the transaction is exempt or taxable
- Advising on when to apply the option to tax
- Preparing and submitting option to tax notifications to HMRC
- Reviewing contracts and sale agreements to ensure VAT compliance
Our advice is particularly valuable in commercial deals involving leases, mixed-use sites, and conditional contracts.
The Capital Goods Scheme
The Capital Goods Scheme (CGS) is a key area where property and VAT intersect, especially for high-value assets such as buildings and refurbishments. If your business incurs input tax on capital items worth £250,000 or more, CGS adjustments may apply over a period of up to ten years. We help with:
- Identifying CGS assets
- Calculating initial input VAT
- Managing annual adjustments based on actual use
- Advising on record-keeping obligations
Mistakes in CGS calculations can trigger HMRC assessments years later. Our support aims to minimise exposure by reviewing both current and past property-related input tax claims.
Industry-Specific Knowledge
We work with clients across construction, property investment, development, and commercial leasing. Whether you are building new homes, refurbishing offices, or selling mixed-use plots, we offer relevant VAT insight tailored to your activities. Our role is to make sure the right VAT decisions are made at the right time—before contracts are signed and long before problems arise.
Speak to Our VAT Property Specialists
From VAT on construction and conversions to land sales, option to tax, and the Capital Goods Scheme, we provide practical advice that protects your business and keeps HMRC issues to a minimum. Contact My Tax Consultants today for property-related VAT support that’s accurate, timely, and based on years of experience with complex UK transactions.
