Churchill & Jones Real Estate Limited Churchill & Jones Real Estate Limited Churchill & Jones Real Estate Limited

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Frequently Asked VAT Questions

My company rents homes on a weekly basis, we currently add and pay 10% government room tax, will we have to pay this along with the 7.5% VAT

No, the room tax will be eliminated when VAT starts

What is the situation with the stamp Tax/duty?

Stamp duty/tax remains the same after VAT is implemented until further notice.

Is there VAT on vacant land sales?

There is no VAT on any type of vacant land but there is VAT on the professional services rendered in the sale of vacant land.

Who invoices the ‘Buyer’ the agent upon closing or the Attorneys?

The real estate company will have to provide a VAT invoice to get paid its commission and the VAT at the completion of the sale. Whoever pays the commission, is responsible for the Vat.

Is the total VAT from the commission paid by the broker for his part of the commission then the agent (for his part of the commission)?

The real estate company will have to provide a VAT invoice to get paid its commission and the VAT at the completion of the sale.

My understanding is the broker would pay the net amount of VAT. The VAT from commission less the VAT from the agent. Then in turn the agent would have to pay the VAT from his/her commission if they are over $ 100,000.00 in earnings.

Realtors are not to pay VAT out of their commission because as a VAT Registrant they are obligated by law to charge VAT on their services, receive payment and pay it over to the VAT Office.

The Broker collects the commission from the sale then pays VAT. Does the agent then have to pay VAT

The real estate company will have to provide a VAT invoice to get paid its commission and the VAT at the completion of the sale. If the “agent” is an employee of the real estate company then there is no further VAT liability when the agent is paid.

Is VAT only paid on residential rentals under 45 days

Realtors need to change their terminology on VAT paid versus VAT billed. On the actual rental (i.e. Lease Agreement) residential rentals under 45 days are VAT liable whereas rentals over 45 days are not. If a leasing fee is due to a real estate company for securing the rental and provided the real estate company is a VAT Registrant then there is VAT charged on the leasing fee.

If the agent pays his own NIB and they make over 100k, do they have to pay Vat on their commissions earned?

If the “agent” is an employee of the real estate company then there is no further VAT liability when the agent is paid.

My commission is paid by the attorney will the VAT be paid by the attorney as well? Will I have to file that in my records?

The real estate company will have to provide a VAT invoice to get paid the VAT at the completion of the sale. And yes you will have to keep a record.

Will VAT have to be paid on commercial sales in addition to Stamp Tax?

No Vat on Commercial Sales – However Vat will be on the real estate fees and legal fees.

If a company owns multiple units and wants to sell them as individual units is this considered a commercial or residential sale.

The sale of each property is looked at based on its “use” or “intended use” to determine VAT liability. If the units are sold as a residential unit, then VAT is paid on the professional fees only

If I rent a home I own and use it as an investment property, is this considered commercial property with VAT payable on sales price?

Under the VAT Act, any income property is deemed a “commercial property”. However, if the rental period is in excess of 45 days then no VAT is to be charged on the rent as the intended use is a rental of a “dwelling”.

There is no VAT on the Commercial sales price as of the new amendment issued by the Ministry of Finance which was issued on Nov 16, 2014. However, VAT will still be applied to the legal fees and real estate fees.

Also see Section 10 of the VAT Regulations.

If I rent my vacation home by the week when I am not using it, is this considered commercial property with VAT payable on sales price?

Under the VAT Act, any income property is deemed a “commercial property”. However, if the rental period is in excess of 45 days then no VAT is to be charged on the rent as the intended use is a rental of a “dwelling”.

There is no VAT on the Commercial sales price as of the new amendment issued by the Ministry of Finance which was issued on Nov 16, 2014. However, VAT will still be applied to the legal fees and real estate fees.

Also see Section 10 of the VAT Regulations.

If I rent my apartment is this considered commercial property with VAT payable on sales price?

Under the VAT Act, any income property is deemed a “commercial property”. However, if the rental period is in excess of 45 days then no VAT is to be charged on the rent as the intended use is a rental of a “dwelling”.

There is no VAT on the Commercial sales price as of the new amendment issued by the Ministry of Finance which was issued on Nov 16, 2014. However, VAT will still be applied to the legal fees and real estate fees.

Also see Section 10 of the VAT Regulations.

I am about to take an exclusive listing for six months which will spill over into the new year, how will this affect our commission charges?

The VAT Act is law and therefore supersedes any written contract between two parties. To be safe, the realtor should include a provision for VAT in the listing agreement as being a tax on its commission in addition to the commission due and payable.

Are there provisions for us if we register to re-coup the VAT paid on things such as goods and services that we pay for in our business such as gas, auto repairs, paper, ink, desk fees etc.

If you are a VAT Registrant, then yes in regards to the VAT paid on certain expenses in your business. These will be deemed VAT Input Credits and are to be deducted out of the VAT that you bill your clients/customers.

What if a pending sale does not close prior to January 1st 2015, will this transaction be subject to VAT?

Yes this transaction will be subject to VAT.