Land and property
This notice cancels and replaces Notices 742 (March 2002).
1.1 What this notice is about
This notice explains when transactions involving land and buildings are exempt from VAT. We recommend that you also read Notice 742A “Opting to tax land and buildings”. The land law in Scotland differs in many ways from that in England and Wales. Notice 742/3 “Scottish land law terms may help you to understand these differences”.
1.2 What's changed
This notice has been updated to reflect legislative changes that temporarily introduce a 5% reduced rate on supplies of hotel accommodation, holiday accommodation, seasonal pitches for caravans including supplies of facilities provided in relation to the pitches and pitches for tents including supplies of facilities provided in connection with the occupation of the pitches.
All references in this notice to 'temporarily reduced rated' or 'temporary reduced rate' are to supplies made between 15 July 2020 to 31 March 2021.
1.3 Who should read this notice
You should read this notice if you make, or intend to make, supplies of any interest in land, buildings or civil engineering works.
1.4 The law covering this notice cover
Section 31 of VATA 1994 holds that goods and services specified in Sch 9 to the Act are exempt supplies. Schedule 9, Group 1 specifies those supplies of land and buildings that are exempt from VAT and those that are excluded from the exemption.
The UK land exemption is based on the European legislation in Art 135 of Council Directive 2006/112. This requires member states to exempt