Value Added Tax Consolidation Act 2010 section 93

Supply of immovable goods (old rules)

Section 93 sets out the special provisions that apply in relation to reversionary interests and post-letting expenses in respect of properties supplied under the VAT on property rules in place prior to 1 July 2008.

• A taxable "interest" in immovable goods under the old rules is one created for at least 10 years, or for a shorter period with an option to extend to 10 years or more, and where an interest contains extension options it is deemed to run for the full extended period.
• Where a reversionary interest was created prior to 1 July 2008, a subsequent disposal of that reversionary interest is generally not subject to VAT unless the property has been developed by, on behalf of, or to the benefit of, the person making the disposal.
• A landlord who disposed of an interest in immovable goods prior to 1 July 2008 in a transaction chargeable to VAT is entitled to deduct VAT on post-letting expenses that are directly related to the taxable lease, including expenses for services the landlord is obliged to provide under the lease, rent collection, rent review, and the exercise of break clauses or extension options.
• VAT on post-letting expenses that are not reflected in the terms or the capitalised value of the lease is not deductible, and these rules apply equally to a replacement landlord who is bound by the conditions of the original lease.

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