VAT and real estate — the option to tax, delivery and revision in one assessment
Assess three real estate situations with one rule set: whether the option to tax a lease holds on the percentage of taxed use, how a supply works out for VAT and transfer tax — a new building within the two-year window, building land, an opted supply or exempt — and what a change in use means for the revision of a capital good over the remaining years.
Who it’s for
What the tool does
The option is not the end but the start of ten years
Taxed letting is permitted only while the tenant uses the property at least ninety per cent for taxed activities — seventy per cent in the designated sectors. If that percentage drops, the option lapses, and that feeds through to the VAT recovered on acquisition or renovation: it is revised over the years remaining in the ten-year period. Which is why a figure of eighty-five is not a comfortable margin but a point of attention: not a problem today, but a risk that returns every year.
For a supply the pivots are different: does the object fall within two years of first use, is it building land, or has the parties opted for a taxed supply. Each of those routes determines not only whether VAT applies but also whether the concurrence exemption from transfer tax does — and that difference runs into the tens of thousands quickly. The tool gives the outcome per situation with its legal basis, and records it with the tool version and the dataset vintage.