Overview of VAT and property issues

By Tolley

The following Value Added Tax guidance note by Tolley provides comprehensive and up to date tax information covering:

  • Overview of VAT and property issues
  • What are land and property transactions?
  • Supply of goods or services
  • Exempt supplies of land
  • Supplies of land that are not exempt from VAT
  • Conclusion

This document discusses these in detail, together with the meaning of land; whether the transaction is a supply of goods or services; exempt supplies of land; non-exempt supplies of land and their VAT treatment.

The VAT treatment of transactions relating to land and property is very complex. Care needs to be taken when determining the correct VAT treatment. This guidance note is intended to provide you with a brief overview of the main points that need to be considered, as well as links to other guidance notes that provide a more in depth analysis of the points raised.

Notice 742 

More detailed information on land and property transactions can be found in VATLP01000

What are land and property transactions?

The following section provides a brief overview of the most common types of land and property transactions.

Lubbock Fine & Co v C & E Comrs (Case C-63/92) [1994] STC 101 (subscription sensitive); De Voil Indirect Tax Service V6.322 (subscription sensitive)

See also VAT and Property, para 2.29.

Supplies of land

For VAT purposes, the term 'land' includes any of the following:

VATA 1994, Sch 4, parah 4; VATLP02200
  • buildings
  • civil engineering works
  • works
  • walls
  • trees and plants
  • waterways, ways, watercourses and commons
  • any other structure or natural object in, under or over 'land' that continues to remain attached to it (ie certain fixtures and fittings)

A business makes a supply of land if it grants one of the following:

  • a grant of a freehold or leasehold interest in the land (VATA 1994, Sch 4, para 4)
  • an assignment of a lease by an existing tenant to a new tenant
  • a surrender of an interest in land to the person who granted the interest

An interest in land includes a 'legal' or

More on Supplies of land and property: