Generic selectors
Exact matches only
Search in title
Search in content
Post Type Selectors
Search Products
Filter by Categories
Company Secretarial
General Business
General Interest
Investing in Property
Personal Growth
Personal Wealth
Trusts and Estate Planning

There’s no VAT charge on letting of residential property, but be careful if you own a residential hotel, frail care facility, retirement home or similar long term accommodation

So, you own a house or a residential unit and rent it out. That is not a vatable supply.

If you own commercial property for rental, then that is vatable at the current rate of 15%.

It gets interesting if someone stays in your guest house, B&B, hotel, retirement home, frail care home or the like.

If the person stays for 28 days or less, then the full amount of charges attracts VAT.

If, however, the stay is for longer than 28 days only 60% of the amount charged regularly (i.e. as part of the package) is deemed to be vatable at 15% from day one. Thus the effective VAT rate drops to 9%. The declaration (VAT201) discloses only the 60% as vatable sales and the 40% is not disclosed. This will probably result in the issue by SARS of an IT14SD when the Income Tax Return is submitted and it will then be necessary to submit a reconciliation between turnover per VAT returns and turnover per the Income Statement.

The full amount of Input VAT is claimable as the 40% non-vatable sales is not treated as exempt sales.

If you want it from the horses mouth, go to s10(10) of the VAT Act.


  1. Chris Barton

    My daughter is in rented accomodation in a college .
    What is the vat payable to the college on Electricity.

XHTML: You can use these tags: <a href="" title=""> <abbr title=""> <acronym title=""> <b> <blockquote cite=""> <cite> <code> <del datetime=""> <em> <i> <q cite=""> <s> <strike> <strong>

Looking for even more informative content? Check out the books I have written which have proved to be very popular.

Need help with your Trust or Business?

Contact us today or set up a free meeting with our CEO, Derek Springett. We have been offering expert advice and business services since 1971. You can also view see our full list of services.

Do you want to leave your cart?

Your cart is awaiting your next purchase, so please proceed to the Home page and continue shopping. If you are leaving your cart because of problems, why not give us a call on our 24 hr numbers 063 866 8928 or 011 805 0030 (subject to load shedding)? If all else fails, call Derek, our CEO on 082 552 9696. We’ll do what we can to help