Transitional properties - freehold or freehold equivalent interests held prior to 1 July 2008

When is the supply of transitional properties taxable?

What is the treatment when the vendor was entitled to claim back VAT incurred on the acquisition or development of the property?

The Value-Added Tax (VAT) treatment of the supply of the property is the same as the treatment that applies to properties completed on or after 1 July 2008.

Where the property is considered new, the supply of the property is taxable. The taxable amount is the full consideration for the supply.

Where the property is supplied when it is no longer considered new, the supply is exempt from VAT. However, the vendor and the purchaser, may jointly opt to tax the supply, if they are both taxable persons carrying on a business in the State. Where the option to tax is exercised, the purchaser must account for the VAT on the supply on the reverse charge basis.

What is the treatment when the vendor was not entitled to reclaim VAT incurred on the acquisition or development of the property?

The supply of the property on or after 1 July 2008 is exempt from VAT. However, the vendor and the purchaser may jointly opt to tax the supply if both are carrying on a business in the State.

Where the option to tax is exercised the purchaser must account for the VAT on the supply, on the reverse charge basis.

Next: What if further development is carried out on or after 1 July 2008?