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A couple who booked a meeting with me were not sleeping at night because they had been doing more than R1m a year turnover from their two multi-unit AirBnB premises and they weren’t VAT registered.

What does the law say about this?

  • As soon as you exceed R1m a year VATable turnover, you must register as a VAT vendor. If you don’t, SARS may deem you to have done so and demand the VAT portion of all your invoices, even if you didn’t add VAT. This is what they were panicking about.
  • The legislation is open to various interpretations and I am not senior council.
  • I did recommend that the client phoned SARS and asked what their view was.
  • Residential accomodation does become VATable if domestic services, such as cleaning, washing, ironing, meals, entertainment, but more importantly water, electricity, gas, television, radio. are included in the price. This is commonly the case with boarding houses, guest houses, retirement homes, frail care homes etc , but also AirBnB. (s1 VAT Act Definition – Commercial accomodation and Definition – Domestic goods and services)

So, at this point, I am of the view that letting a separate unit or units via AirBnB may well be subject to VAT if the turnover exceeds R1m per year.

There has been some debate about this article and the matter is by no means settled. If anyone comes up with a legal case that finally settles this matter, I would really appreciate their commenting on the article with a reference to the case.

The main problem for me is that the definition of Commercial accomodation ends with “but excluding a dwelling supplied in terms of an agreement for the letting and hiring thereof”.

And a Dwelling is defined as “except where it is used in the supply of commercial accommodation, any building, premises, structure, or any other place, or any part thereof, used predominantly as a place of residence or abode of any natural person or which is intended for use predominantly as a place of residence or abode of any natural person, including fixtures and fittings belonging thereto and enjoyed therewith”


  1. Not sure why you don’t think airbnb falls in here:

    “commercial accommodation” means-
    (a) lodging or board and lodging, together with domestic goods and services, in any house, flat,
    apartment, room, hotel, motel, inn, guest house, boarding house, residential establishment,
    holiday accommodation unit, chalet, tent, caravan, camping site, houseboat, or similar
    establishment, which is regularly or systematically supplied but excluding a dwelling supplied in
    terms of an agreement for the letting and hiring thereof.

    I’ve never heard of an AirBNB that doesn’t include furniture (domestic goods) and cleaning before and after (services).

    Especially if you’re running 2 multi-unit premises. That sounds quite a lot like a hotel to me.

    1. Hi Carl,
      This is a tricky bit of legislation as I’m sure you agree. I spent a lot of time recently reading the Act with a client on Zoom and that’s when I drew my conclusions. I need to re-visit the Act before I can respond to you. So, I’ll be back shortly.

      1. Hi Carl,
        I have edited and added to the article and, I hope, added some clarity to this issue. There is no doubt that there is room for interpretation – a gap that should be closed by legislation.

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