05/09/2026
๐ฆ๐๐๐ ๐๐ฆ ๐ ๐๐ข๐๐ก๐ ๐๐ข๐ก๐๐๐ฅ๐ก ๐๐ก๐ ๐ฉ๐๐ง ๐ฅ๐๐ค๐จ๐๐ฅ๐๐ ๐๐ก๐ง๐ฆ
In property transactions either Transfer Duty or VAT is payable. If the Seller is a VAT vendor the question is whether VAT will be payable at 15% or at 0%.
๐๐ถ๐ฟ๐๐๐น๐, it must be ascertained whether the vendor sells the property in furtherance of its enterprise. If the vendor is a dentist whose practice is VAT registered and he sells his residence (a property not used or applied in the course of the business), the transaction will not attract VAT, and the purchaser will pay transfer duty.
๐ฆ๐ฒ๐ฐ๐ผ๐ป๐ฑ๐น๐, ๐๐ต๐ฒ ๐ฟ๐ฒ๐พ๐๐ถ๐ฟ๐ฒ๐บ๐ฒ๐ป๐๐ for the sale as a going concern in terms of Section 11(1)(e) of the Transfer duty Act must be met:
1. Both the seller and purchaser must be registered ๐ฉ๐๐ง ๐๐ฒ๐ป๐ฑ๐ผ๐ฟ๐.
2. The enterprise supplied must be capable of separate operation.
3. Both the seller and purchaser must agree ๐ถ๐ป ๐๐ฟ๐ถ๐๐ถ๐ป๐ด that the business is
disposed of as a going concern.
4. Both the seller and purchaser must agree ๐ถ๐ป ๐๐ฟ๐ถ๐๐ถ๐ป๐ด that the business is an income-earning activity on the date of transfer.
5. That the assets necessary to continue its income earning activity will be disposed of to the purchaser.
6. That the agreement concluded specify that the consideration for the supply of a going concern includes VAT at 0%.
๐๐
๐ฎ๐บ๐ฝ๐น๐ฒ๐:
1. Sale of a commercial property, dentist practice, including the equipment and where the purchaser will continue using the property as a dental practice. The business operations continue undisrupted before and after registration.
2. Sale of a farm including farm implements and livestock and the farming will continue after date of registration.
๐๐บ๐ฝ๐ผ๐ฟ๐๐ฎ๐ป๐:
SARS will not consider zero rating if the VAT returns are not submitted and up to date.
The agreement of sale should contain a provision that if SARS declines the Zero-rated transaction, the standard 15% VAT rate will be payable by the purchaser.
๐ฅ๐ฒ๐๐ถ๐ฑ๐ฒ๐ป๐๐ถ๐ฎ๐น ๐ฝ๐ฟ๐ผ๐ฝ๐ฒ๐ฟ๐๐ ๐๐ฎ๐น๐ฒ ๐ฎ๐ ๐ฎ ๐ด๐ผ๐ถ๐ป๐ด ๐ฐ๐ผ๐ป๐ฐ๐ฒ๐ฟ๐ป:
Residential property leased for residential purposes is exempt of VAT (irrespective if the property is registered in a companyโs name). Therefore, the transaction is not subject to VAT.
