Persons who develop residential property for purposes of selling it are often not able to immediately sell the property as intended. If they are unable to do so for extended periods of time, developers often resort to renting the property to tenants in the interim to cover some of the costs and related obligations, such as servicing loans. This decision has VAT consequences. This article describes the the VAT effect of temporary letting and provides an overview of a new provision introduced into the VAT Act to ease some of the resulting VAT burden on property developers.
Source Pieter van der Zwan
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