Property 24/10 - 212

On SA’s infrastructure spend
Government’s allocation of R847 billion to infrastructure projects over the next three years is a critical step in clearing the backlog and the underspending on critical infrastructure projects that South Africa urgently requires.

If this spend is to yield effective results, rapid progress must be made in converting the policy frameworks and legislation embedded in the New Growth Path, National Development Plan (NDP) and Infrastructure Development Bill into tangible projects which are ready to go to market.

This is according to Mike Peo, head of infrastructure, energy and telecoms at Nedbank Capital, who says historically the lack of a clear framework has been one of the key challenges towards allocating and spending funds appropriately on strategic infrastructure projects.

“For spend on infrastructure to be effective there firstly needs to be the right policy framework, and an acceptable regulatory framework coupled with projects which are “bankable”, irrespective of whether or not these are to be funded by the public or private sector.”

Zuma approves amended land Acts
President Jacob Zuma has assented to the Restitution of Land Rights Amendment Act and the Property Valuation Act of 2014.

The Act will amend the Restitution of Land Rights Act of 1994 by, amongst others, amending the cut-off date for lodging a claim for restitution, the Presidency said on Monday. It will further regulate the appointment, tenure of office, remuneration and the terms of and conditions of service of judges of the Land Claims Court.

“The Act now provides for re-opening the lodgement of land claims by those who missed the 31 December 1998 deadline to lodge land claims. The lodgement of land claims shall take place over a period of five years, from 30 June 2014 to 30 June 2019.”

Agents warned of social media abuse
Agents will antagonise clients and lose business if they commercialise their social media profiles, say Tony Clarke, Managing Director of the Rawson Property Group.

Clarke says Facebook, Twitter and LinkedIn have proved to be exceptionally powerful tools, far more than most people anticipated pointing out that these are great platforms for keeping in touch with previous clients, friends, family and business colleagues. However, if these online media platforms are used as sales tools, e.g. for the listing of properties now up for sale, the recipients will react negatively to those sending them out – and we have seen instances of this already happening.

Clarke says estate agents making use of social media should realise that they are there for fostering friendships, not for monetary gain.

Investment property tax Q&As
Two Property24 readers ask about tax deductions for investment property and what the implications are if moving to Australia. Johan Swart, tax manager at Legal & Tax, advises:

Question 1: Rental property - what percentage of expenses can be deducted?
My wife and I jointly own a property in Mpumalanga that we rent out and she does all the administration and contracts. What percentage of the monthly rental amount (rental agencies I see take up to 12% for administration costs) that we receive can we deduct from tax for administration costs and must this be divided 50/50 for tax purposes? Both my wife and I work so this is a second income.

What to consider before buying a home
While taking the step from renting to buying is exciting, it is a major financial commitment that should not be entered into without the proper consideration.

This is according to Adrian Goslett, CEO of RE/MAX of Southern Africa, who says there are a number of essential aspects that should be carefully measured beforehand to ensure that the buyer is making the right decision and is buying a property that meets their needs both now and in the future.

“Buying a home is not a decision that will only affect the buyer’s financial well-being now - it will have ramifications in the future as well. That is why it is so important for a buyer to make an informed decision based on their life plans and what their criteria are at the moment and how their plans and needs could change over the next five to ten years.

Who is liable for services accounts?
Many landlords and tenants are confused about who should be responsible for municipal accounts when moving into a new home.

In the City of Tshwane tenants are no longer able to apply for a services account in their own names. The services accounts have to remain in the name of the registered owner and it is their responsibility to make sure that the account is paid in full and on time.

If this is not the case, the owner will be held liable for the payments regardless of circumstances and even though the arrears were created by the tenant. Of course the property owner can take legal action against a non-paying tenant at a later stage, but this will take some time and effort.

It is also important to note that owners are liable for the monthly payments of both the services accounts and the rates and taxes accounts whether the account was received from the municipality or not.

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