01
Default treatment is not the final answer
Many land and property supplies are exempt, but new commercial buildings, new dwellings, relevant residential and charitable use, parking, accommodation and an option to tax can produce different outcomes.
- Age and nature of building
- Sale, lease or licence
- Option-to-tax history
- Purchaser and intended use
02
Recovery can change over time
Intended use drives initial recovery, but later changes can require adjustments. Partial exemption and the Capital Goods Scheme may remain relevant long after completion.
- Pre-completion costs
- Mixed-use developments
- Change of intention
- Capital Goods Scheme
Primary sources
Tax guidance changes. These official sources were checked on 31 August 2026.
VAT Notice 742A: option to taxVAT Notice 706: partial exemptionVAT domestic reverse charge for construction