Residential rent is generally exempt — but commercial property rental is a taxable supply once you cross the registration threshold.
Last updated: June 2026
Renting out residential property (dwellings) for domestic accommodation is generally exempt from VAT in South Africa — you never charge VAT to tenants, regardless of your portfolio size. The trade-off is that you generally cannot claim input VAT on costs related to that exempt letting activity.
Renting out commercial property (offices, retail units, warehouses) is a taxable supply of services. Once your taxable turnover from this activity (combined with any other business activity) exceeds R1 million, you must register for VAT and charge 15% on the commercial rent, with the ability to claim input VAT on related costs like maintenance and improvements.
No. Residential rental income is generally exempt and doesn’t count toward the VAT registration threshold in this scenario.
Yes. Short-term/holiday accommodation income is generally treated as taxable "commercial accommodation," even though ordinary long-term residential rental income remains exempt.
Generally no, since residential letting is exempt and exempt supplies don’t carry the right to claim related input VAT.
A specific category covering short-term and holiday-type accommodation supplied in the course of a business, similar to hotel-style lodging, distinct from ordinary long-term residential letting.
No, it’s the same R1 million threshold as any business — the key difference is simply that residential rental income doesn’t count toward it because it’s exempt.
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