Taxes and Compliance for Sectional Titles and HOAs

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Posted: November 25, 2025

Taxes & Compliance for Sectional Titles and HOAs

Taxes and compliance obligations are often overlooked in community scheme management. Yet, failing to meet these requirements can result in penalties, reputational damage, and even legal action against the scheme or its executives.

This article outlines the key tax considerations, compliance deadlines, and filing obligations for Sectional Title Schemes and Homeowners Associations (HOAs) in South Africa.

Understanding the Scheme’s Tax Obligations

Income Tax

Community schemes are taxable entities in South Africa.

  • All schemes must be registered for income tax with SARS, regardless of whether they are liable for a tax payment or fall below the taxable threshold.
  • Levies are generally not taxable income.
  • Other income (interest, rentals, penalties, cell tower rentals) is taxable.
  • If taxable income exceeds the threshold, the scheme must submit annual tax returns to SARS.

VAT

Most schemes are not VAT-registered, as levy contributions are not subject to VAT.
However, schemes that earn more than the compulsory VAT threshold from taxable supplies must register.

Employment-Related Taxes

If the scheme employs staff directly (e.g., cleaners, gardeners, security guards):

  • PAYE (Pay As You Earn) must be deducted from salaries and paid to SARS.
  • UIF (Unemployment Insurance Fund) contributions must be made monthly.
  • Compliance with the Basic Conditions of Employment Act is required.

Annual Filings and Compliance

CSOS (Community Schemes Ombud Service)

  • Annual return and levy payments to CSOS are mandatory.
  • Financial statements must be submitted after the AGM.

CIPC (Companies and Intellectual Property Commission)

  • Applies to HOAs registered as NPCs (Non-Profit Companies).
  • Annual returns must be filed to maintain good standing.

PAIA (Promotion of Access to Information Act)

  • Schemes must have a PAIA manual available to members.

Consequences of Non-Compliance

Non-compliance can result in:

  • Late filing penalties from SARS, CSOS, or CIPC
  • Legal disputes with owners
  • Reputational harm affecting property values
  • Directors or Trustees being held personally liable in extreme cases

Keeping Your Scheme Compliant

Best practices include:

  • Keeping accurate and up-to-date financial records
  • Engaging an experienced Managing Agent to monitor deadlines
  • Scheduling compliance reviews at least annually
  • Providing transparency to owners on compliance status

Conclusion

Taxes and compliance may not be the most visible part of managing a community scheme, but they are essential for legal and financial health. Scheme Executives who stay informed and proactive can avoid penalties, protect the scheme’s reputation, and fulfil their fiduciary obligations.

ANGOR Property Specialists assists community schemes in meeting tax obligations and managing all compliance filings on time.

http://angor.co.za.www6.cpt3.host-h.net.www6.cpt3.host-h.net/blog/2025/10/15/levy-collections-made-clear-the-laws-the-challenges-and-how-to-get-it-right/

 

http://angor.co.za.www6.cpt3.host-h.net.www6.cpt3.host-h.net/blog/2025/10/10/levy-collections-legal-framework-remedies-and-effective-enforcement/

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