Can I re­claim VAT on a par­tial knock-down and re­build?

Build It - - EXPERT HELP -

I am con­sid­er­ing buy­ing a prop­erty that has plan­ning per­mis­sion to knock down the ex­ist­ing prop­erty and build a 174m² dwelling in its place. How­ever, a small part of the ex­ist­ing house (about 20%) is listed and has to be re­tained and re­fur­bished. I can­not work out whether I can re­claim the VAT on this project. I read that that you can’t if any part of the ex­ist­ing house is re­tained.

The ar­chi­tect I have hired has de­signed a con­tem­po­rary glass cor­ri­dor join­ing the new house to this smaller sec­tion of the old one that must re­main. This is­sue could be a deal breaker for the project’s vi­a­bil­ity and nei­ther my agent nor the plan­ning of­fice has given me a clear answer.

e ex­is­tence of a plan­ning con­di­tion re­quir­ing you to re­tain 20% of the prop­erty will have no bear­ing on the VAT re­claim. So I am afraid you will not be able to claim, as it is not a com­pletely new dwelling. You would only get a pass if it re­ferred to keep­ing a sin­gle fa­cade (or two on a cor­ner plot). It sounds like you are obliged to re­tain more than this, but with­out fur­ther de­tails I do not know for sure. Sim­i­larly, the listed sta­tus of the re­main­ing part of the house is ir­rel­e­vant to the tax sit­u­a­tion.

So, in your cir­cum­stances, full VAT will likely be payable on the whole project. e rules are open to in­ter­pre­ta­tion and there are ex­emp­tions, so call the VAT DIY helpline to see if you might claim ex­emp­tion or some re­lief. e num­ber is 0300 200 3700.

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