VAT and Real Estate: Dismantling Costs and Input Tax Deduction Explained

• VAT and real estate advisory services are complex and involve high transaction amounts
• Different VAT issues arise in the lifecycle of a property: creation/acquisition, operation, dismantling or sale
• Input tax deduction is allowed for VAT invoiced and paid within the scope of business activity
• There is no entitlement to input tax deduction for supplies used for tax-exempt services
• Exceptions exist for certain uses, such as letting living rooms for accommodation
• Dismantling costs and input tax deduction depend on whether there was a change of ownership before demolition
• Dismantling costs without prior change of ownership are based on previous business use for input tax deduction
• Future use and change of use are not relevant for input tax deduction in connection with dismantling costs.

Source: primetax.ch

Note that this post was (partially) written with the help of AI. It is always useful to review the original source material, and where needed to obtain (local) advice from a specialist.

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