Rent to buy scheme

Overview

The rent to buy scheme can broadly be described as an attempt by property developers to attract potential purchasers into buying a house.

The developer structures the agreement using an initial period of renting with an option to purchase at the end of the letting period.

There are many variations of this scheme, and as such, the exact Value-Added Tax (VAT) treatment can only be established by the facts of each individual case. However, this section provides a general indication as to how to treat some of the variations of this scheme from a VAT viewpoint.

Next: How the rent to buy scheme operates