VAT on barn/house sales

[Comte]

Hope someone can help clarify rumours about new property legislation on the sale of renovated barns or houses that have been empty for a long time and subsequently renovated.

 

We purchased an old farmhouse and barn in Dec 2005 in the department of Correze (bought by an SCI, not as individuals). We are currently renovating the house (which had been empty for 30 years) and considering converting the barn once we have obtained change of use. Have heard recently that new legislation on any sale will result in maximum VAT payable on the full sale price if sold within 5 years of completion of works (ie. not from purchase date).

 

Does anyone know the facts or can anyone point me to any relevant information?

 

 

 

 

[BJSLIV]

In France VAT is  charged on any new-build. As a conversion your barn would be classed as new-build. They deduct 19.6% VAT from the proceeds but you get credit for any VAT paid on invoices for work done. So in effect you pay VAT on the profit, in other words the value added. The five years runs from the date you submit the completion notice.

[Albert the InfoGipsy]

I've been wondering for some time about the same question applied to renovation, as distinct from conversions.

I've seen houses advertised ranging from 'habitable' (yeah?!) to 'ruin' (2 walls standing). I would guess that at some point in this spectrum the new-build TVA rules would kick in. Any ideas?

[BJSLIV]

I think the rules are broadly similar to the qualification for 5.5% rate. If the project qualifies for 5.5% VAT then VAT won't be levied on the sale proceeds.

[phylisbide]

You probably know that the only invoices you can set against the job when calculating the figures when you sell either the main property or the barn are the French registered builders' invoices - any materials must also be included on their invoices.If you purchase materials separately ie bricomarche etc, these are not allowable against the works done for CGT. Hope I'm not teaching Granny etc..