SARS VAT Ruling VR 015 (31 March 2026) shows how furnished accommodation supplied directly to students can qualify as commercial accommodation, standard-rated for VAT. It does not mean every student rental is taxable. The contract and the services supplied decide the treatment.
VR 015, Supply of student accommodation, issued on 31 March 2026, deals with one applicant: a developer letting furnished rooms directly to students, with services such as cleaning, furniture and internet. A ruling of this kind binds SARS only in relation to the applicant and any co-applicants, and is not a practice generally prevailing. It is a useful guide to SARS's thinking, not a rule that settles every arrangement.
The starting point is the definitions in section 1(1) of the Value-Added Tax Act 89 of 1991. A dwelling let as a person's home, without the regular supply of related services, is an exempt supply. Commercial accommodation is lodging, or board and lodging, supplied together with domestic goods and services in the course of an enterprise, and is taxable. Which one applies turns on the actual contract and what is supplied, not on any single feature.
On the applicant's facts, SARS ruled that the supply is commercial accommodation, so the developer makes taxable supplies and charges VAT at the standard rate, subject to the enterprise and registration requirements. Where commercial accommodation is supplied to a person for an unbroken period exceeding 28 days, section 10(10) values the supply at 60% of the all-inclusive charge. Note the order: the 28-day rule fixes the value once the supply is already commercial accommodation; it does not, on its own, turn a letting into commercial accommodation.
The VAT cost depends on how the charge is expressed. On a VAT-exclusive all-inclusive charge of R10 000, output tax is R10 000 by 60% by 15%, which is R900. If that R10 000 is the VAT-inclusive charge, the tax contained in it is R10 000 by 60% by 15/115, which is R782.61. Amounts charged separately from the all-inclusive rate are not automatically part of the 60% calculation. Input tax on construction and running costs may be claimed, but only subject to the normal rules in sections 16, 17 and 20 of the Act.
This is where the Respublica case matters, and it cuts the other way from what many assume. In Commissioner for SARS v Respublica (Pty) Ltd [2018] ZASCA 109, the Supreme Court of Appeal held that a developer's lease of buildings to a university was not commercial accommodation, because the university could not be a lodger and there was no contract between the developer and the students, so the supply was ordinary letting at the standard rate rather than the 60% commercial accommodation. Read with VR 015, the lesson is consistent: look at who contracts with whom and what is actually supplied.
If you own, develop or finance student accommodation, do not assume a single treatment in either direction. The structure needs to be tested against the definitions before the VAT position is settled. We can work through yours.
Sources: VAT Ruling VR 015 (31 March 2026); Value-Added Tax Act 89 of 1991, sections 1(1), 10(10), 16, 17 and 20; CSARS v Respublica (Pty) Ltd [2018] ZASCA 109.
Technical review: 19 October 2026. General information, not advice; confirm your own facts before acting.