Contributed By Hawkins Hatton Corporate Lawyers Ltd
Sale of real estate is exempt from VAT unless the seller has opted to tax the land and buildings. Most new-build commercial properties will attract standard-rated VAT at 20%.
If, however, a property is acquired with a sitting tenant, the 'transfer as a going concern' exception will apply provided both parties are VAT registered and hence no VAT will be payable on the purchase price. However, this exemption only applies where the buyer opts to tax the property before the transfer.