Is VAT payable on purchase of Site?

L

lfcjfc

Registered User
Messages
167
I've searched the forums here but cant find the answer to this. Can anyone tell me if VAT is payable by either vendor or purchaser on the sale of a site by a farmer to an individual that intends to build their primary residence on it?
I know stamp duty is payable but cant find a direct answer on VAT

Thanks.
 
No direct attempt to charge VAT but in the draft contract under "special conditions" there is a mention of the purchaser being liable to pay any VAT that may become "exigible" as a result of the transaction.
 
Just get your solicitor to confirm with the other party's solicitor that it is in order to delete the VAT provisions in the contract before you sign them....
 
The basic question you need to ask is has there been any development work done to the site since 31 Oct 1972 i.e. since the introduction of the VAT system to Ireland.

If the site is purely a greenfield site there should be no VAT chargeable on the sale.

If the site has been developed then it gets a bit more complicated and VAT may be chargeable. You should note that the definition of development for VAT purposes is quite broad. For example, the construction of sewers etc. might constitute development

The VAT clause is a standard clause included in contracts. I would agree that if no VAT chargeable that you should seek to remove it and the Vendor should have no objection to this.

If the Vendor is proposing to charge VAT you should get your solicitor to obtain VAT Requisitions of Title from the Vendor's solicitors which should explain why they are proposing to charge VAT.

I've tried to be as brief as I can, but VAT on property is messy, so if the Vendor is proposing to charge VAT it might be best to get professional advice.

Hope this helps
 
There is an uninhabited, semi-derelict cottage on the site which hasnt been lived in for many years (not sure exact date) and would pre-date 1972. I guess this makes it more complicated.
Who/how is the decision made on whether VAT will be due?

Thanks
 
It is the Vendor's responsibility to account for VAT to Revenue. But the Vendor cannot just decide to charge VAT. He must have a basis for doing so and certain conditions must be fulfilled.

Based on your description of the site, it think it is highly unlikely that VAT should arise.

But I think your first step should be to find out whether the Vendor intends to charge VAT - the inclusion of a VAT clause in the contract is not necessarily evidence of this.
 
If you are paying VAT on a site, what do you (the buyer) need for Revenue to prove you are paying VAT?

1. VAT clause in the contract
2. VAT Requisitions of Title from the vendor's solicitor as stated above.
3. Anything else?

I am in the process of buying a site at present and the vendor is charging VAT. Important to know the above as I want SD calculated on the pre-VAT price.

Anything else I should know?
 
Hi techman,

I would think that a VAT invoice from the Vendor would the most important document from Revenue's perspective.

This should indicate the VAT exclusive value plus the VAT charge. You should ensure that you get this from the Vendor.
 
You must log in or register to reply here.
Back
Top