De registering Vat before sale of investment property

C

caracian

Guest
I haven't seen this asked in any other threads.

I currently have two investment properties.

When I purchased my first investment property I registered for Vat and received a refund at 13.5 %. I have been paying vat at 21 % on the rental income.

Can I de-register from one property only and pay back the Vat difference on that property only or do I have to register completely and repay vat owing ot the revenue, in order to avoid paying Vat at 21 % on the sale price ?
 
Hi,

if you are only selling one property then i think you would be better staying registered for vat . Below are reasons (assuming the properties are of similar value)

1) Providing you are not selling at a loss, then the capital gains tax will be less.

2) the amount of money you owe to the vat man will be reduced.

3) Stamp duty will be due on pre vat price for person who purchases.

4) You wont have to come up with the money to deregister prior to selling. And in current market , god knows how long a sale might take

5) You will still have the advantage of being registered on your other property.

You also need to check if the vat on sale is 21% or 13.5 with revenue as it could be a costly mistake. I think it is only 13.5%

This is only my opinion and you should take advice from a tax adviser
 
Steel blue I was loving your advice untill you hit the line,
"You also need to check if the vat on sale is 21% or 13.5 with revenue as it could be a costly mistake. I think it is only 13.5%"

OP is correctly paying back 21% VAT, so that puts into question the rest of your advice.

Especially this one:
3) Stamp duty will be due on pre vat price for person who purchases.

caracian, please continue to update this thread if you ever get a definitive answer. IN principle I think it makes sense to stay registered, but Im not 100% on the implications of the sale. It was always my intent to deregister before the sale. However I do not have the issue of having multiple properties under the one VAT number.
 
yankinlk

Try reading the post properly. I am talking about vat on the sale not on the rental income. I have an email from renvenue that implies that vat rate on the sale of a vat registered property is 13.5% . Therefore my last line advises to get tax advice. Also if you ever purchased a property that is vat registered, the stamp duty is on the prevat price. Again confirm with tax adviser.
 
You must log in or register to reply here.
Back
Top