VAT change offers conversion rebate
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Your support makes all the difference.A RECENT change in the rules governing VAT will save many people thousands of pounds on the cost of building or restoring their home, writes Sue Fieldman.
However, others will face a huge bill, when previously they would have paid nothing.
People who convert a barn, warehouse, office, or other non-residential building into a home, can now reclaim the VAT on all goods and most services incurred.
Martin Scammell, a senior manager with chartered accountants Ernst & Young, said: 'The concession applies to DIY conversions completed after 21 April 1994. And there is a time limit - you have to apply no later than three months after the completion of building. People who completed in the last few months should act immediately.'
Anyone buying a freehold or long leasehold conversion direct from developers may want to remind them about their VAT windfall, and ask for a price reduction.
It is not all good news on the housing front. The construction of a new house will remain zero-rated, but the definition of construction is being tightened. It will exclude any development where part of a previous building survives above ground level.
This imposition of VAT is due to come into effect later in the year.
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