[Question] Commercial Property Sale

[Roger15]

Hi there

If a developer bought a vacant piece of land and commenced construction of a commercial building and claims all VAT pertaining to the construction of it. Then leases out units for rental income purposes. So it is investment property. Now after 3 years, the developer has an offer to sell. Is the sale to another company who will be also using it to be leased out subject to Zero rating? Technically speaking the developer has claimed all VAT inputs and now pays VAT at Zero Rate when selling the development.
IS this correct?

Thanks

[Christel]

Hi Roger15,
Refer to the VAT 409 on the sars websit - www.sars.gov.za then enter "VAT 409" in the seach spage and hit enter. I'm sure you will find your answer in this guide.

[Wildsniper911]

Good day Roger

Only in the following circumstance: Both parties must sign an agreement that specifically states that the enterprise is disposed of as a going concern.

It will be difficult in your case as your business is the development and selling of property. SARS will be focusing on that and thus will assume you sold it as part of your normal business.

I have posted a link that will give you an overview (Its a PDF) http://www.meumannwhite.co.za/downlo...d_property.pdf

Hope this helps

[Christel]

VAT 409 - refer to page 64, Chapter 9.

[Roger15]

Hi Christel,

Please can you email me the SARS direct link to the guide, I cannot seem to find the publication on the SARS search.

Thanks

[Dave A]

Please can you email me the SARS direct link to the guide, I cannot seem to find the publication on the SARS search.

Try this link - should take you straight to it.