Here's what the law says about claiming input tax on retirement home property
You can't claim input tax where you buy the business as a going concern: If, however, you decide to buy an operating retirement home from someone who is a Vat vendor, it will constitute the sale of a going concern at the zero rate of Vat and you won't be able to claim input tax.
What if you buy a retirement home from someone who isn't a Vat vendor?
If you buy a retirement home from someone who isn't a Vat vendor, you'll pay transfer duty on the fixed property. You can, however, claim this back as input tax if your retirement home qualifies as a provider of commercial accommodation.
What if you convert part of your house into a retirement home?
You're entitled to a 'change of use' input tax claim on the fixed property and movable assets (for example, furniture) to be used for the retirement home.
Now that you know what the law says about claiming input tax on retirement home property, make sure you comply so you can avoid getting on the wrong side of SARS.
Enjoyed this article? Subscribe to receive these free articles in your inbox daily.