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VAT on new houses

I am a small builder and have just completed a new house.  It is proving difficult to sell in the current economic climate and I am thinking of renting it out in order to cover the bank interest.  When I eventually sell will the sale still be at zero rate?

The first sale of a new residential property will always be zero rated whether or not it has been let out previously.  However your proposed course of action does raise another possible problem. As residential letting is exempt from VAT, then there may be cause for concern that some of the VAT reclaimed relating to the new build falls under the partial exemption rules. I would strongly advise you to take professionasl advice on this.

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