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Do you pay VAT on auction house?
Romeoliverpool
Posts: 2 Newbie
Hi all,
I need some advice, I am currently in the process of buying a house, the contracts have come through and just need signing. This is my question, the house was on a auction site but we have put a offer in for it before it goes to auction, the property is a repossession and is in the hands of the administrators, they have accepted our offer hence the contract being sent however it says the price is exclusive of VAT, does this mean we have to pay this on top of the agreed price?
Any help would be appreciated before we send off the signed contract.
With thanks.
I need some advice, I am currently in the process of buying a house, the contracts have come through and just need signing. This is my question, the house was on a auction site but we have put a offer in for it before it goes to auction, the property is a repossession and is in the hands of the administrators, they have accepted our offer hence the contract being sent however it says the price is exclusive of VAT, does this mean we have to pay this on top of the agreed price?
Any help would be appreciated before we send off the signed contract.
With thanks.
0
Comments
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Is it a commercial property?0
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no, residential.0
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Romeoliverpool wrote: »Hi all,
I need some advice, I am currently in the process of buying a house, the contracts have come through and just need signing. This is my question, the house was on a auction site but we have put a offer in for it before it goes to auction, the property is a repossession and is in the hands of the administrators, they have accepted our offer hence the contract being sent however it says the price is exclusive of VAT, does this mean we have to pay this on top of the agreed price?
Any help would be appreciated before we send off the signed contract.
With thanks.
The sale of a residential property (dwelling in VAT speak), will be exempt from VAT in the scenario you describe.
Exempt means the sale cannot have VAT applied to it. The only time VAT applies to a dwelling is either when it is first new (new build) whereby it is a zero rated (taxable) sale or when the dwelling is part of a commercial property - most often seen when buying a pub which has accommodation upstairs for the landlord - these are usually sold as a mixture of taxable (20% and exempt (no VAT) on a floor area basis or more often on a 90/10 basis.Anger ruins joy, it steals the goodness of my mind. Forces me to say terrible things. Overcoming anger brings peace of mind, a mind without regret. If I overcome anger, I will be delightful and loved by everyone.0 -
Yes. The contract says "exclusive of VAT" probably because it's a standardised wording.0
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You will have vat to pay on the auction fees however0
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