Vat Rate timing rules
Category Industry News
VAT rates
Uncertainty exists whether the Value Added Tax (VAT) rate will be increased in the next Budget Speech and, if so, the rate which will apply to:
- property transactions subject to VAT; and
- commission charged by estate agents in respect of property transactions.
Property transactions subject to VAT
If VAT (as opposed to Transfer Duty) applies to a transaction for the sale of a property, the time of supply (for purposes of the application of the prevailing VAT rate) is deemed to take place:
- on the date of registration of the property at the Deeds Office; or
- on the date on which payment is made in respect of the property (by the purchaser to the seller, excluding the date upon which the conveyancer receives the purchase price and/or deposit), whichever date is earlier.
In the event of an increase in the VAT rate, the VAT payable on the property transaction will be the new, higher rate if registration of transfer is not effected before the date announced for the increase, unless of course the Minister declares otherwise.
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Author: Bisset Boehmke McBlain
