Andrew Needham looks at the VAT consequences of selling new commercial buildings and civil engineering works.
For VAT legislation purposes, a new commercial property or civil engineering work can be partly constructed or up to three years old and still count as being new.
VAT liability
Normally, the sale or leasing of commercial property is exempt from VAT unless the owner has opted to tax it. However, there is an exclusion from the exemption for new or partly completed commercial buildings and civil engineering works that removes them from the exemption so that they become subject to standard-rated VAT.
Standard rating does not just apply to the first sale but to any freehold sale within three years of completion. The only circumstances when the standard rating would not apply would be when the property could be zero-rated. Generally, this would only
