1 - Stoke on Trent:
- The total cost of all the infrastructure works on the first site was £450,000; if the council was doing it again it would find a simpler/lower cost solution to the drainage issues.
- There were some challenges with VAT. The council did not want to have to charge 20% VAT on top of the sale price, as this uplift would put many people off. On the first Penkhull project the council was able to resolve this, but on future sites it will use a third party to manage the sales so that it can avoid charging VAT.
2 - Graven Hill
What is a Golden Brick and what is the relationship between this and VAT?
The term refers to the condition in which the plots at Graven Hill will be transferred to purchasers at the completion of the sales contract. Some self build schemes only offer the land for sale whereas at Graven Hill, all of the plots will be sold with the foundations, drainage, substructure walls, ground floor slab and utility connections already in place. This is termed as a Golden Brick sale. The foundations, drainage, substructure walls, and ground floor slab will be installed as per each self builder’s design. The adoption of this method of delivery is necessary in order that the sale constitutes the grant of a first major interest in a residential dwelling which currently attracts a zero rating for Value Added Tax.
It sounds a little like the type of technique which would have a camp of 'offended' trustafarian hippy-dippy-doodahs shouting about tax avoidance on their site if it was being done by an evilz private corporation.
All elucidation gratefully received.
Edited by ferdinand, 25 January 2016 - 08:40 AM.