Where you’re buying property that has an option to VAT in place, VAT should be charged on the sale of the land and buildings.

However, if a building or part of a building is to be converted to a dwelling, a number of dwellings or solely for relevant residential use, the purchaser can request the disapplication of the option to tax.

... A VAT1614D certificate can be given to the seller of a property by the purchaser requesting the disapplication of the option to tax for the conversion of the building to a dwelling or a relevant residential purpose. This certificate should be given to the seller before the exchange of contracts, letters or missives or the signing of heads of agreement (this timing is important, not make the mistake of agreeing heads of terms without having addressed the VAT issue)

But in the case of the sale of land, the vendor is not selling an existing property for conversion so the VAT1614D certificate cannot be accepted by the vendor.

The sale of the land will be with VAT as the option to tax still applies.

If you're a developer then it is essential that you obtain specialist advice - email us on info@property-tax-advice.co.uk