Who should register for VAT?

Option to tax lettings

The letting of a property is exempt from Value-Added Tax (VAT). However, as a landlord you can opt to tax the letting of certain properties. But, if you own multiple properties you can limit the option to tax a letting to one property or specified properties.

If you opt to tax a letting, you will have to register and pay VAT on the rents from those properties.

You cannot opt to tax the following:

  • A letting of residential property
  • A letting between connected persons, where the tenant has less than 90% deductibility.