Michael Noonan (Limerick City, Fine Gael)
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I am advised by the Revenue Commissioners that renovation works carried out on properties are liable to VAT regardless of the owner of the property.  In this case, where a public body engages a contractor to carry out renovation on their property, the renovation is liable to VAT at the 13.5% reduced rate.  However, where a public body, or any landlord, had opted to charge VAT on a letting, they have a commensurate right to recover VAT incurred on goods and services used for the purposes of the taxed letting, including any VAT incurred on property renovation.  However, if the letting is not taxed, the public body has no right to recover the VAT charged on any renovation works.

In the case where community groups engage contractors to undertake renovation works, as stated earlier, such work would be liable to VAT at 13.5%.  In general, community groups would not have an entitlement to recover such VAT incurred.  This is because supplies by community groups, such as the provision of childcare facilities, are in general exempt from VAT. This means that they do not register for VAT, do not charge any VAT on their supplies and consequently cannot recover VAT incurred on goods and services used for the purposes of their VAT exempt supplies.