Vat Question re future sale of new build house.

dog1

Hi,
I was wondering what the vat situation is regarding the sale of a recently completed, self built, timber framed, house in Scotland.

As the vat was claimed back by the owner on the recent completion of construction. Is there a period of time in which the owner must reside within the premises prior to selling it? Or, Can the owner sell it immediately without paying back any of the vat which they claimed??

And, if I were to buy this house and the owner failed to repay any vat which might be due. Might I be liable to inherit this fee with the house ??

The owner in question is a private individual, not a builder or company, it is their first project and the house was well constructed by a professional builder.

My only worry is regarding the conditions of the vat which they have claimed back and whether or not they can sell the property to me at such an early stage??

This is my first post and I would appreciate any relevant help/advice.

Thank You.

Alan_M_2

I think VAT covers the entire UK so the area shouldn't effect the rules.

For a new build all vat is reclaimable, (usually done by the builder by zero rating his work and supplies). A certificate of completion is issued by the local building inspector (or whatever the term in Scotland). From the moment this certificate is in effect the property is no longer eligible for the VAT free scheme.

The certificate is the defining cut off point, there is no clawback as far as I'm aware.

If you want to make sure, phone HMRC, they are generally very helpful, I use their helpline regualrly as I get all sorts of requests to supply VAT free. New build schemes. disability scheme etc.

dog1

Thanks for the info.

My main query was if there is anything to stop someone building a house, reclaiming the VAT and then immediately selling it ?

I thought that the first owner may have to reside there for a period of time first ? OR Repay the vat OR some portion of it ?

jennifernil

I think you should stop worrying. Builders build houses and reclaim the VAT and sell them to other people all the time, a private person doing it is no different.
Now whether he might have to pay any income tax or similar is another story. As this is his first house then unlikely, but if he does several one after the other it could be considered a business. But that is his problem, not yours. There is no problem with the VAT.
On a self-build the VAT must be reclaimed within (If I remember right) 6 months of Building Control issuing the Completion Certificate. We built our present (timber frame) home (in Scotland) 19 years ago so I am a little rusty! And you only get one shot at it. (the VAT that is)

dog1

Hopefully my question has now been answered.
Thank You once again.