Value Added Tax Consolidation Act 2010 section 94

Supplies of immovable goods (new rules)

Section 94 sets out the rules for determining when a supply of immovable goods (land or property) is taxable or exempt from VAT, provides for a joint option for taxation of otherwise exempt supplies, and addresses the treatment of residential property developed for sale in the course of business.

• A supply of property is taxable only while the property is considered "new": broadly, within five years of completion (the five-year rule), or within 24 months of aggregate occupation following a prior taxable supply between unconnected persons (the two-year rule), or within 20 years of development where the property was never completed.
• Where a property is sold in connection with an agreement to develop it, the sale is always taxable regardless of any exemption that would otherwise apply, and there is no VAT registration threshold for property transactions.
• Where both the seller and the purchaser are taxable persons carrying on business in the State, they may exercise a joint option for taxation on an otherwise exempt supply; the purchaser then accounts for the VAT on a reverse charge basis.
• The first sale of residential property by a developer (or a person connected with the developer) who was entitled to input credit on its acquisition or development is always taxable, regardless of the five-year and two-year rules.