Fiducia TogetherVAT on property
One of the most complex areas of VAT, and expensive to get wrong.
Please note: This page explains what a term means. It is general information, not legal, financial, tax or investment advice, and it does not know anything about your business. Before you sign, file or commit to anything, check it with an accountant, a solicitor, or the official guidance we link to.
What it means
Most supplies of land and buildings are exempt from VAT, with important exceptions and an option to tax.
Why it matters
The sums are large. A misunderstanding on a commercial property purchase can be a five- or six-figure error.
What it looks like in practice
The option to tax makes an otherwise exempt supply taxable, allowing input VAT recovery — and once made it generally lasts twenty years.\n\nNew commercial buildings are standard-rated. Residential conversions may qualify for reduced rates.
What to watch out for
Buying a property without establishing whether the seller has opted to tax. It changes the price by 20% and the SDLT with it.
Where to get proper advice
Your accountant. And a VAT specialist for property — general practice is not enough here.
Where to read more
Last reviewed 2026-08-28 by Fiducia Together · Next review due 2027-08-28
Please note: This page explains what a term means. It is general information, not legal, financial, tax or investment advice, and it does not know anything about your business. Before you sign, file or commit to anything, check it with an accountant, a solicitor, or the official guidance we link to.