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Thread: Vat on a residential propery

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    Vat on a residential propery

    Good Day to All
    I have just started the process to sell my house. I have hopefully done enough research about all the costs involved, but there is one question I have that I just cannot find an answer to so I can rest easy. The purchase price on the mandate from the estate agent states my asking price, but also states, including VAT. Now surely if this is so then working the VAT back the actual asking price is 15% less and that 15% is liable to be paid to SARS. The house is where I live, and we are in the process of building a new home to move to. We used to work from home many years ago and pay rates as business and general, and I never changed that in case we had to work from home again. I am assuming that when the property is sold the new owners (if they want to carry on a business from the residence, will have to apply again). Surely this would not have anything to do with VAT on my house or is this just the way mandates are worded.?
    Really appreciate any feedback.
    Thanks
    Gemais

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    By my understanding, the deciding issue is whether the owner/seller is a registered VAT vendor.
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    Gemais (15-Feb-19)

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    Thanks, yes that is what I have found wherever I looked. I am a registered VAT vendor for my business only and the property is private, nothing to do with the business, same as my private vehicle. I still get worried that the price says inclusive of VAT as with anything that attracts VAT that VAT has to go somewhere. I don't want to get to the end of this journey with the sale of my house and get knocked down with the "ignorance is no excuse" answer. Thanks for your reply, I have asked the Estate Agent and even they were a bit flustered as they have never had that query before.

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    My understanding without finer verification research is that, usually monies due to SARS in these property sale transactions are handled behind the scenes by the lawyers handling the transaction (transfer attorneys etc.). This implies that YES the VAT will be paid over to SARS on your behalf and you will get the remainder of the funds or simply the balance. I suppose your agent should have explained this to you because your ASKING PRICE should remain the same and should not necessarily include VAT as you would appreciate that it's unusual for people to have VAT discussions when they sell their houses. Ordinary house owners are not VAT registered neither are they in business of trading houses as their everyday activities.
    Disclaimer: I am not a tax expert nor officially authorised to advise on tax matters, I am just trying to assist.

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    Gemais (20-Feb-19)

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    The seller is not a vat vendor, so there is no vat, only transfer duty.

    The agent simply has one document that caters for all scenarios.

    If I were the seller I would merely annotate the form that the price excludes transfer duty and vat, because if a vat vendor is the purchaser then the duty can be claimed as if it is vat.

  8. Thanks given for this post:

    Gemais (20-Feb-19)

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