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18 January 2018

Property developers may face significant cash flow challenge
South Africa - Moneyweb
VAT relief granted during temporary letting of residential units terminated.

Property developers may face a significant cash flow problem after VAT relief that was previously granted while residential units held for sale were temporarily let, came to an end on January 1.

Residential property developers are generally registered for VAT and entitled to deduct all input tax related to the land and materials of a development project. The developer is then obliged to levy VAT on the proceeds once the units are sold, Gerhard Badenhorst, director for tax and exchange control at Cliffe Dekker Hofmeyr, explains.

Where developers don’t manage to sell all units, the units held for sale are often temporarily let to avoid them from being vandalised and to cover running costs and interest payments.
Moneyweb

Early cancellation of a residential lease
South Africa - SAProperty.com
In ideal rental situations, when a lease is signed the tenant will stay for the full duration of his lease without any complications and the landlord will uphold his obligations, creating a win-win situation for tenant and landlord.

What happens though when the lease is to be cancelled early, whether due to the tenant's circumstances changing or to the landlord wanting his unit vacated?

This can be a tricky situation to deal with, says Sunell Afrika, rentals manager for property company SAProperty.com, as there are obligations to fulfil from both sides, depending on the situation, and the vacating of the premises needs to be handled as amicably as possible.

If there is no cancellation clause in the lease, stipulating conditions where an early cancellation is acceptable and the terms of such, or if either the landlord and tenant are not in agreement with the termination, then either the Consumer Protection Act (CPA) or the Rental Housing Act (RHA) would apply.
Early cancellation of a residential lease

Residential building statistics
South Africa - Absa
Residential building activity remained under pressure up to late 2017

Levels of building activity in the South African market for new private sector-financed housing (see explanatory notes) remained largely subdued up to late 2017 in both the planning and construction phases compared with the corresponding period in 2016, based on data released by Statistics South Africa.

The number of building plans approved for new housing was virtually unchanged at 51 342 plans in the 11-month period up to November last year compared with the same period in 2016. Plans approved in the segment of houses smaller than 80m² increased by 8,8% y/y over this period, with the segments for houses equal to or larger than 80m² and flats and townhouses contracting by 4,3% y/y and 4,4% y/y respectively in January to November last year in terms of plans approved.

The number of new housing units reported as being completed was down by 3,8% y/y to a total of 35 432 units in January to November. The volume of flats and townhouses built increased by 9,9% y/y, whereas both segments of houses completed contracted, by a combined 10,1% y/y to a total of 22 712 unit over the 11-month period.
Building stats Nov 2017

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