Value Added Tax (VAT) for property investors
December 4, 2021
Landlords do not usually need to worry about Value-added-Tax (VAT) when it comes to buy-to-let property investments. Rent is usually VAT exempt. This means that landlords do not charge their tenants VAT on their rent. It also means landlords cannot reclaim the 20% VAT on the labour or materials.
Commercial properties may have a 20% VAT charge when being purchased from a vendor. This VAT on commercial buildings may be reduced or removed.
VAT on property refurbishment may be reduced from the standard rate of VAT of 20% down to 5% for certain property projects. It is possible to make the property a 0% VAT item, which allows landlords to reclaim all VAT paid on a property purchase and refreshment.
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