SiCotty

I'm in the process of buying a new build and I've just had a letter from my Solicitor bringing my attention to the following clause in the contract. If for any reason VAT becomes payable on the property I will be liable. This will be over 30k.

Thinking about it if the Government added VAT on new builds would they be able to back date it to affect this financial year?

Would everybody building thier own home run into this issue as well?

Has anybody else run into this? The builder’s solicitors have refused to remove the clause from the contract. This makes me even more suspicious.

Si

john_s

iTrader: (1)

I don't think they could back date it, VAT is usually applied at the time of the sale, ie when the £ notes change hands.

I've not heard any firm mention of VAT being added to new properties, though the rumour has been about for some years now.

I'd say the clause is there for the builder to cover themselves in case VAT is added to take effect during the build period, ie you have to stand the VAT rather than them. If the builder had to stand the VAT, it would be a significant portion (if not all) of their profit on the property.

John.