Hi,

A property developer has now switched to dealing with developing Life Right Schemes. The developer used to develop sectional title schemes but now has switched his focus to life right schemes as this entitles the entity to have almost a continual/everlasting income based on the fact that the owner entity will always have a right to a percentage of the resale value as the developer has a clause which states that the development entity has the right to a part of income for the resale of all units.

Now the question is, can the developer claim input VAT amounts on the development costs and then when units are finalised, must output VAT be charged on the sale of the units(sale of the life rights to the section of the property). Or is it just the certificate that is exempt from VAT or the whole development in relation to inputs and outputs in total?

Thanks