VAT and Fixed Property

Question 1

When fixed property is sold by a vendor

- VAT consequences for the Seller

Answer 1

• Output VAT is imposed on the transaction in terms of s7(1)(a)
• Time of Supply - s9(3)(d): earlier of registration date or any payment date
• But s16(4): notwithstanding s9(3)(d), output to extent of payment. (unless s10(4) applies)
• The vendor is exempt from Transfer Duty as VAT is payable.

Question 2

When fixed property is sold by a vendor

- VAT consequences for the Purchaser

Answer 2

• Input VAT claimed in terms of s16(3) to extent of taxable supplies in terms of s17(1)
• Time of Supply - s9(3)(d): earlier of registration date or any payment date
• s16(3)(a)(iiA): notwithstanding s9(3)(d), VAT claimed to extent of payment. (unless s10(4) applies)

Question 3

If fixed property is sold by a non-vendor

- VAT consequences for the Seller

Answer 3

• No Output VAT because the seller is not a vendor.

Question 4

If fixed property is sold by a non-vendor

- VAT consequences for the Purchaser

Answer 4

• No actual VAT is being paid as the transaction will attract Transfer Duty.
• Deemed VAT can be claimed if the fixed property is second hand.

• Time of Supply: s16(3)(a)(ii)(bb): notwithstanding s9(3)(d), the purchaser must defer input VAT until registration

But Additional Rules governing Deemed Input Tax and the second hand goods rule:

• Value of Supply for 2nd hand goods: Lower of consideration and OMV
• Input VAT can only be claimed to extent of Payment.