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A note on Vat

5 August 2004

The main cause of lack of initial clarity as to whether a seller is a Vat vendor or not comes down to advertising by estate agents and/or their failure to communicate this fact. Such a situation could prove irksome to a buyer who in addition to having to pay the purchase price and other costs finds himself having to pay an unexpected extra 14% to the seller.

Crisply put, if the seller is registered for Vat and the advertised price is inclusive of Vat then the seller gets the selling price less the Vat. If the advertised price is exclusive of Vat then the buyer must pay the asking price plus 14%. Buyers do not have an option as to whether they would like to pay Vat or not.

Estate agents can search using the "Vat vendor search application" on the SARS website to see if a Seller is registered for Vat or not at: www.sars.gov.za

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