Massive
01-12-2006, 09:12 AM
I am set to purchase a property that is being converted for residential use. The shell has already been stripped bare, and all permissions are in place, but construction will not be complete for 9 months or so.
As part of the terms of the transaction, I must complete very shortly. Not yet having been inspected for residential use, commercial funding is required. Having posed a question about VAT, I now discover it may be payable on the entirety of the purchase, due to the technicality that it is effectively a commercial purchase at this time.
The property is to be immediately leased back to the developer as show homes, but it will never be anything but residential, and is under construction for that purpose alone.
This is a 7 figure purchase, and consequently the addition of VAT would cause the deal to collapse. The developer's solicitors are looking into the matter, but I'd also appreciate any wisdom here. Is there any way around this issue - I'm happy to provide further detail as required.
Regards
As part of the terms of the transaction, I must complete very shortly. Not yet having been inspected for residential use, commercial funding is required. Having posed a question about VAT, I now discover it may be payable on the entirety of the purchase, due to the technicality that it is effectively a commercial purchase at this time.
The property is to be immediately leased back to the developer as show homes, but it will never be anything but residential, and is under construction for that purpose alone.
This is a 7 figure purchase, and consequently the addition of VAT would cause the deal to collapse. The developer's solicitors are looking into the matter, but I'd also appreciate any wisdom here. Is there any way around this issue - I'm happy to provide further detail as required.
Regards