Wednesday, Sep 24, 2008
Another blow to the Housing Market
FT.Com: Housebuilders face extra tax on rents
Another nail in the coffin for the property developers. They could be forced to repay value-added tax they have already claimed back because of differing VAT treatment of selling and letting properties, according to advice published by Revenue & Customs. The tax implications of putting unsold properties on the rental market were likely to come as a shock to some builders.
Posted by jj @ 08:36 AM (380 views) Add Comment
4 Comments
- If you do not have an admin password leave the password field blank.
- If you would like to request a password allowing you to add comments and blog news articles without needing each one approved manually, send an e-mail to the webmaster.
- Your email address is required so we can verify that the comment is genuine. It will not be posted anywhere on the site, will be stored confidentially by us and never given out to any third party.
- Please note that any viewpoints published here as comments are user's views and not the views of HousePriceCrash.co.uk.
- Please adhere to the Guidelines
1. mark wadsworth said...
Yup, yet another example of why VAT is the most evil tax.
The pantheon of taxes, from worst to least worst:
1. VAT
2. Employer's National Insurance
3. Corporation tax/income tax (the more uniform the rate across all sources of income the better, 'flat' does not necessarily mean 'low')
4. Land Value Taxes
2. inbreda said...
I know I shouldn't take so much joy in kicking an industry on it's knees, but I find this so funny it really makes my day.
3. Fingerbob69 said...
I think we can expect some desparate lobbying from the building industry to be allowed a VAT holiday on new, unsold property put up for rent by the builder.
And while this claw-back obviously applies to property that wholly rented, what about property that is part buy/part rent? Surely a pro rata porportion of the VAT should be returned on these aswell?
4. iguana said...
This is not an unexpected consequence, the VAT treatment of new domestic property for resale and that of property offered for rental has been the same since the Finance Act 1972. If this comes a some sort of surprise to a builder or developer then they and their advisors (parasitic accountants and tax planners) are idiots. This position has arisen with each property crash since 1972, and each time numerous builders and developers cry FOUL, and try to avoid the consequences of their actions.
Fingerbob69
The 'clawback' provisions for tax resulting from a change in intentions are available for all to read in the VAT Act 1994, there are also perfectly valid alternative pro-rata methods in case law.
Mark
Not so much an evil tax, but a consequence of EU Membership, to be a member you have to join the VAT club, as we share some interests in accountancy and law I am surprised that you would consider a simple tax on consumption as being worse than a so far not enacted land value tax.... your reasoning?