VAT on commercial property is chargeable when a property has been elected for VAT and the owner has registered an interest in that property and has registered for VAT themselves. This is known as an “opted in” commercial property and the vendor is able to issue a VAT qualifying invoice for the purchase of the property to the purchaser.
You can reclaim the VAT but first it must be paid. The reclaim takes place if HMRC approves the transaction once the reclaim is submitted following the purchase. Eligible reclaims typically take between 45 to 120 days from the date of payment (purchase) and recovery. This can often affect cash flow and potential opportunity, so a VAT bridging loan can be a helpful solution. A commercial property VAT loan enables you to focus on the next transaction rather than allocating cash to HMRC.