Saturday, Mar 06, 2010
Hows about VAT on Property Instead
Telegraph: Shoppers could face VAT on food
Well if they are considering this hows about VAT on houses, we could start with newly built ones and BTL landlords and then move onto 2nd hand houses whilst at the same time getting rid of stamp duty. Commercial property should also be included with an appropriate write-off period, say 10 years.
Posted by enuii @ 09:48 PM (641 views) Add Comment
5 Comments
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1. chrisch said...
VAT is levied on new build housing.
2. stillthinking said...
We already pay tax on food. Where do people imagine the farmers income tax, fuel duty, etc comes from? Taxes are embedded in prices. UK high taxation is embedded everywhere. Idiot boy Darling just increased NI employer contributions, does this make exported goods cheaper or more expensive....
We are on the wrong side of the Laffer curve in every aspect of life which is probably why so many people think we are in an unavoidable debt death spiral.
3. iguana said...
enuii,
There is VAT on all building as I recall, it is at the zero rate on new domestic? and at the full rate on commercial. The rub comes when a domestic new build is not sold as new, but rented out- the 'input tax' then has to be paid back. Lots of developers are clobbered by this.
4. mark wadsworth said...
1. New residential buildings are zero rated when sold, which means that the developer does not charge VAT on the selling price, but can reclaim all the VAT he has paid his own suppliers ('input VAT'). Other EU countries make the developer charge VAT on new builds, so all that happens is the price he pays for land goes down (he cannot just increase his price by the VAT amount because then people would just buy 'second hand' properties).
2. New residential buildings are exempt if the developer rents them out. That means he does not have to charge VAT on rents but cannot reclaim his input VAT.
3. Commercial construction is, by and large, VAT-able in the ordinary way.
4. There are then tens of thousands of stupid exemptions to cloud the picture.
But we know for a fact that the Home-Owner-ists would prefer higher VAT on food to higher tax on properties. They don't care if today's FTBs are reduced to eating baked beans from the tin, as long as they are borrowing at least five times their income to buy a house.
5. enuii said...
Damn, knew it would end up complicated!