How to treat the VAT on the sale or purchase of commercial property 

I WANT TO BUY/SELL COMMERCIAL PROPERTY, HOW DO I TREAT THE VAT OF PURCHASE/SALE AS A VAT VENDOR?

Firstly, if you’re dealing with property, the buyer either pays Transfer Duty OR VAT, NEVER BOTH.

Two things to consider:                                                                       

• Is the property being sold used in the course of the sellers business?
• If the buyer is a VAT vendor and seller also VAT vendor then seller issues a tax invoice and charges VAT output and buyer claims VAT input
•                                                                                                                                             
• Is the property being sold not used in the course of the business by the seller?

The buyer will now be purchasing a 2^nd hand good and will therefore pay Transfer Duty. And should the buyer be purchasing for use in course of business then the buyer can claim Notional input Tax at 14%.

                REFERENCES: Franck P Practical VAT handbook (2017) 59/003 – 004.