ABC Ltd had a warehouse constructed on its behalf in 2006 for €1,000,000 plus VAT €135,000. The development work was completed on 6 August 2006. ABC reclaimed all of this VAT and carried on its warehouse business from the premises. The warehouse was still held at 1 July 2008 and no development had been carried out on it since its acquisition.
On 3 February 2009 ABC sells the warehouse for €1,500,000. As ABC was entitled to reclaim the VAT on the acquisition of the property and it is the first sale of a developed property within five years of completion, the sale is taxable.