Value Added Tax Consolidation Act 2010 Schedule 1 paragraph 11

Letting of immovable goods

Schedule 1 paragraph 11 exempts the letting of immovable goods from VAT, subject to certain exclusions and to the landlord's right to opt to tax the letting.

• The letting of immovable goods, including emergency accommodation, is exempt from VAT, but the exemption does not extend to standalone machinery lettings, hotel or guest-house accommodation (other than emergency accommodation), commercial sporting facilities, car parking operated by car-park operators, or the hire of safes.
• A landlord may opt to tax lettings by including a written provision in the lease or issuing a written notice to the tenant; a landlord who has reclaimed VAT on the acquisition or development of the property is treated as having exercised the option.
• The option to tax cannot apply where the property is used for residential purposes, the letting is between connected persons (unless the tenant can recover at least 90% of the VAT on the rent), or the property is occupied by a person connected with the landlord (unless the occupant meets the same 90% threshold).
• Termination of the option to tax — whether voluntary or automatic — triggers a Capital Goods Scheme adjustment if it falls within the CGS adjustment period for the property.