The recent change in the VAT rate, from 14 to 15 percent, prompted a revisit of the issue around VAT, specifically with regards to levies in body corporates, share-block companies and home owners or property owners associations in South Africa.

According to Martin Bester, Managing Director of Intersect Sectional Title Services, a subsidiary of the Spire Property Group, levy income at body corporates, share-block companies or home owners or property owners associations (except those created for managing time-share schemes) is exempt from VAT, provided such schemes supply services to their members and the costs for these services are paid from levy fund contributions received from members.

However, such schemes may apply to SARS for voluntary registration as VAT vendors.

This would typically apply to schemes of a mixed-use, commercial, industrial and or retail nature. Very few residential schemes would warrant voluntary VAT registration.

Intersect manages several VAT registered schemes, including industrial business parks, commercial office parks, mixed-use high-rise developments and sectional title registered hotels.