Ground rent increases on leasehold apartment?
4 years ago | 6 comments
Can my freeholder charge me VAT on purchasing a parking space?
10:40 AM, 10th October 2022, 4 years ago
7
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Hello, I have a leasehold flat that I bought 4 years go, it’s about 50 years old, above shops.
I thought I had parking allocated as there is parking which we’ve been using, and we were told parking was included, recently they have outsourced management to a parking company.
Unfortunately, I didn’t read the lease properly, and there is no parking mentioned in it, I can now buy a space for £10,000.
The freeholder is charging VAT on top of this.
I thought it was exempt and I am having trouble getting clarity on this.
Can anyone help?
Thank you.
Rosie
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Member Since January 2016 - Comments: 473
11:54 AM, 10th October 2022, About 4 years ago
“and we were told parking was included”
Do you have anything in writing or was it just verbal?
Member Since June 2022 - Comments: 111
4:07 PM, 10th October 2022, About 4 years ago
Reply to the comment left by Darren Peters at 10/10/2022 – 11:54
The lease say’s it all!!!
I didn’t think VAT was chargeable on land purchase’s.
Member Since April 2020 - Comments: 159 - Articles: 1
4:20 PM, 10th October 2022, About 4 years ago
VAT should not be applicable. The freeholder is trying it on (surprise).
Member Since January 2020 - Comments: 559
5:03 PM, 10th October 2022, About 4 years ago
It is possible that the parking is VAT opted, especially if it is part of a commercial property. VAT options are a matter of fact and the owner should know; unfortunately I have encountered people strugglig to prove this in the past.
If the owner has ever rented it out then they would have been charging VAT on the rent, but possibly they weren’t making any charges.
If the parking is VAT opted then VAT is due on any sale price.
Make sure that your solicitor gets confirmation as to the option.
You could adjust the purchase price so as to be VAT inclusive, then it makes no difference to you. It’s unlikely you wil be able to recover the VAT if you’re going to use for domestic purposes.
Member Since November 2020 - Comments: 134
4:08 AM, 11th October 2022, About 4 years ago
The answer is ‘That depends’.
I recommend you read HMRC’s take on the subject. You’ll find their advice located within “Land and Property (VAT Notice 742)”, section 4. Direct link follows.
https://www.gov.uk/guidance/vat-on-land-and-property-notice-742#sect4
Hope that helps.
Member Since July 2013 - Comments: 90
12:54 PM, 15th October 2022, About 4 years ago
I didn’t read the lease properly
Did you buy this lease without a solicitor or qualified lawyer advising you?
If not, you have taken a big risk. Normal freehold comveyancing can be easy. Leasehold never is.
If you have had a lawyer, perhaps you should consider whether you have been given correct legal advice on what was included.
Member Since July 2013 - Comments: 90
1:00 PM, 15th October 2022, About 4 years ago
Another point: your lease has 50 years expired.
How long is the remainder? If it is a 99year lease, then I suspect you won’t be able to sell except to a cash purchaser (because it won’t be mortgageable because of the shortness of the lease) or to someone who requires you to get a lease extension before buying.