This policy seeks to outline the rules regarding the Rental and Sale of Land and Buildings and Value Added Tax.
Schedule II, paragraph 2 (d) of the Value-Added Tax exempts for the purposes of VAT:
“A supply of-
- accommodation in a residential dwelling; or
- leasehold land by way of lease (not being a grant or sale of the lease of that land) to the extent that the subject land is used or is to be used for the principal purpose of accommodation in a residential dwelling erected or to be erected on that land.
Pursuant to the above, rent paid on housing for the purpose of private dwelling is exempt from VAT. However, the rental of a building to operate a business attracts VAT at the standard rate of fourteen percent (14%) providing the landlord/landlady is registered to charge VAT.
The leasing or sale of leasehold land to construct a house for private dwelling is also exempt from VAT. On the other hand, the sale of leasehold land, the sale of the lease or the rights to the leasehold land and the leasing of land or building will attract VAT at the standard rate of fourteen percent (14%) when acquired for business purposes.
It should be noted that the sale of houses constructed and sold as private residences by registered businesses attracts VAT at the standard rate of fourteen percent. In addition, businesses, which are registered for VAT and are involved in the continuous supply of the sale of land as part of its taxable activity (a supply of land) are required to charge VAT at the standard rate also.
Houses Supplied by Central Housing and Planning Authority
Schedule II Paragraph 14 of the Value-Added Tax Act, Chapter 81:05, exempts the supply of complete housing units costing less than six million, five hundred thousand dollars ($6,500,000) and built by or on behalf of the Central Housing and Planning Authority or any other approved entity.
Therefore, housing units constructed by or on behalf of the Central Housing and Planning Authority costing less than six million, five hundred thousand dollars ($6,500,000) do not attract VAT.
Further, the sale of land by the Ministry of Housing, which is a budgetary agency, named in the Fiscal Amendment and Accountability Act No. 20 of 2003, is exempt and will not attract VAT by virtue of Schedule 11, paragraph 2(f) of the VAT Act, which provides for the exemption of sales by budgetary agencies.
Registration of Budget Agencies
Notwithstanding, Section 11 (6) of the Value-Added Tax Act, Chapter 81:05 which states that “The State, an agency of the State, or a local Authority that carries on a taxable activity is required to apply for registration from the date of commencement of that activity.”
Consequently, any agency of the State, or a local authority who carries on a taxable activity, such as, construction of housing units by or on behalf of the Central Housing and Planning Authority costing in excess of six million, five hundred thousand dollars ($6,500,000) and is not registered pursuant to Section 11 (1), must do so within fifteen (15) working days if the threshold made under Paragraph 3 of the VAT Regulations for taxable supplies have been met or exceeds fifteen million dollars ($15,000,000).
The State Agency or the Local Authority Agency must apply for VAT Registration and submit the following documents to the Central Registration Unit, GRA Headquarters, 200-201 Camp Street or the various Regional Offices:
- Registration of the State Agency or the Local Authority Agency (an act of Parliament).
- A completed application form from the State Agency or the Local Authority Agency.
Contact Us:
Tax Advisory Services Section
Communications & Tax Advisory Services Division
Guyana Revenue Authority
200 -201 Camp Street
Georgetown
Guyana
Tel: 227-6060 | 227-8222 Ext: 8000
Email: taxadvisory@gra.gov.gy | gravat@gra.gov.gy
Website: www.gra.gov.gy
