Taxing property: The facts
It is difficult to think of any transaction involving immovable property that is not affected by the taxes and duties which are imposed by the legislation in South Africa.
Either transfer duty or VAT affect most property transactions and their requirements are summarised below together with a brief discussion of a recent tax break in regard to property which has been introduced by the Income Tax Act.
Transfer duty
Transfer duty is imposed in terms of the Transfer Duty Act and, generally speaking, is payable when immovable property is acquired.
Transfer duty is payable by the purchaser to SARS and is calculated as a percentage of the purchase price. If SARS is of the opinion that the purchase price is less than the fair value of the property, then SARS will calculate the transfer duty based on the fair value.
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The secret root of housing fraud
I wish I could understand the many "secret societies" that seem to exist around us.
Societies that have been forged on corruption, chance-taking and getting rich by any possible means. I am not party to them now - I never have been - and because of that I don't have intimate details of how they function either.
And, because they are pretty secretive, I'm never taken into the inner sanctums either. What am I talking about? Well here's a bit of background.
First of all, our Minister of Human Settlements, Tokyo Sexwale, has announced that he and his team intend to conduct a comprehensive audit of houses that have been handed over to the poor and indigent members of our society.
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Rental agencies abound, so beware
With the recent downturn in the property sales market, many estate agents have turned to rentals as a source of additional income, or to bridge a drop in income.
The result is that there are now literally hundreds of rental agencies from large, well-established property groups to brand new entrants into the market with little to no experience. Only some of these are able to provide a reputable, reliable service that benefits both tenant and landlord alike.
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Banks continue to ease lending criteria
South Africa's leading bond originator Ooba said on Tuesday that banks continued to relax their lending rates in May where larger bond sizes were approved and smaller deposits were required.
The low interest rate environment seems to be helping consumers who are fortunate enough to still have jobs.
Banks eased lending criteria towards the end of 2009, which has helped creditworthy consumers easily access credit.
The oobarometer price index revealed that the average purchase price increased 12,2% year-on-year (y/y) in May to R872,083, representing the third double-digit growth percentage recorded this year.
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Take quick 'test' for 1st-time buyers
Young people need to be really sure they are ready before they buy their first home, or they may well come to regard the property as a burden.
"Home ownership should be a pleasure and not a drag, so we suggest that young people who are thinking about buying a home first ask themselves some tough questions," says Martin Schultheiss, CEO of the Harcourts Africa property group.
These questions include the following:
- Am I ready to take on all the responsibilities of home ownership, including regular maintenance and upkeep?
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