What is the VAT treatment of a building that is used both for residential and commercial purposes?
The sale or rent of a property that used for both residential and commercial purposes must be treated as follows:
- The first supply of a residential part of a building will be zero-rated and the subsequent supply will be VAT exempt.
- There will be a VAT of 5% levied on the supply of a commercial part of a building. The tax paid on this supply can be recovered.