Letting of immovable goods

This section provides information on the Value-Added Tax (VAT) treatment of letting property from 1 July 2008. However, it does not relate to lettings covered by transitional measures for a waiver of exemption.

Letting property is a service, and includes leasing and letting. It does not include supplies of freehold equivalent interests. Lettings are exempt from VAT.

However, a landlord may opt to tax a letting except where:

  • the property is used for residential purposes
  • or
  • the letting is to a connected party, unless the tenant is entitled to deduct at least 90% of the tax chargeable on the rent.

Premiums paid between landlords and tenants, or to third parties, are taxable in certain circumstances. A premium is a sum payable in connection with the granting, surrendering, or the assignment of a lease.

Further guidance contains more detailed information on:

  • the VAT treatment of lettings of immovable goods
  • and
  • the supplies of emergency accommodation and ancillary services.