VAT liability on sale of residential houses and condominium units of a condominium project.

As per the VAT amendment Act, No.25 of 2018, the VAT exemption granted for sale of residential houses and residential condominium units of a condominium project has been removed with effect from August 16,2018. However, as per the Inland Revenue notice published on 29th August 2018, tax payers have been communicated that, “as instructed by the Ministry of Finance and Mass Media, a policy decision was taken to extend the said exemption until March 31,2019”

 Accordingly, with effect from April 1,2019 VAT liability on same shall arise as follows.

 1.Sale of residential houses other than condominium housing units -Exempt from VAT (Continue the exemption)

2. Condominium housing unit of a condominium housing project - if the value of any single unit of that project does not exceed Rs. 15Mn, sale of such units will be exempted from VAT. Here , value means the higher of the maximum price or the market value. 

Therefore , if the value of any Condominium housing unit exceeds Rs. 15 Mn, sale of all the units of that project will be liable for VAT.

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