VAT on rent: residential versus commercial

Whether rent carries VAT depends on how the property is used.

Residential rent

Renting a home to live in is exempt from VAT. The landlord charges no VAT — and cannot recover input VAT on costs linked to that rental.

Commercial rent

Renting offices, shops, warehouses or other commercial space is taxable at 15% when the landlord is VAT-registered. As a tenant registered for VAT, you can usually deduct it as input tax.

Points to check

• Mixed buildings: a building with homes and shops is treated by use, unit by unit.
• Hotels and furnished short stays are treated differently from long-term residential rent.
• Lease contracts should state whether the rent includes or excludes VAT.
• Selling property falls under the real estate transaction tax, not VAT, in most cases.

Tip for landlords

If your commercial rental income crosses the registration threshold, you must register and charge VAT — even if property is not your main business.