Commercial vs Residential Land: Tax Implications

Key Takeaways:

• Rates: Commercial properties pay 2x-3x higher Municipal Rates.
• VAT: 18% VAT applies to certain commercial leases and massive condo sales.
• Water/Electricity: Tariffs are significantly higher for commercial usage.

Don't just register your home as a "Business Place" without thinking.

Assessment Tax (Rates)

Municipal Councils assess the "Annual Value" of your property.

• Residential: ~5% - 10% of Annual Value.
• Commercial: ~15% - 20% of Annual Value.

Utility shock

If you change your electricity tariff to "General Purpose" (Commercial), your bill will triple compared to "Domestic".

Verdict: Keep the property residential on paper unless you legally required to change it for a license.