Developer joy as south africa announces vat relief

South African is set to provide temporary relief from VAT payments for residential property developers who lease units before intended sale.

David Honeyball, tax partner at Grant Thornton, said: "This Change is communicated by section 18A of the VAT Act as inserted by the Taxation laws Amendment Bill of 2011, which allows for residential property developers to lease their units without being liable for VAT payments.”

"They have introduced temporary relief to developers that rent residential fixed properties before intended sale,” he added.

The amendment will see developers obtain a grace period of 36 months to rent a property before sale, starting when it is first rented. After this period if the developer is still renting the property then the VAT tax will be triggered on the market value of the property at that date.

Source: OPP.org.uk