VAT on Investment property - Business

[mango]

Hi All,

I need some help here, we are a business that builds house for clients. We decided to build one of our own houses to be rented out.

I know this falls under Investment property as we will rent it out, my question is the following:

- Do we claim the Input VAT when we buy the materials to build the house?

Then, if so what will happen if we decide to sell the house when it is complete? Obviously this will trigger a "change of use" at SARS and
this would be seen as "stock" and we might pay over output VAT.

Thank you

[mango]

Hi All,

Can anyone please assist? I'm unable to find the correct info online.

[Andromeda]

I don't think it's a change of use. It is simply a capital disposal and you enter it in Block 1A (when and if it is sold)

Because you are a vendor you will definitely be expected to charge VAT (but no transfer duty) and account for it as above.