Can trustees monitor tenant selection?
The question that often comes up in sectional title schemes, is whether the trustees of the scheme are allowed to get involved in the letting of units in that scheme. Are they able to influence the landlord in his tenant selection or prevent him from renting it out in the way he wishes?
Michael Bauer, general manager of IHFM, says that the legal relationship is between the landlord and the tenant, but in most sectional title schemes short-term letting is not allowed in the conduct rules.
“In my opinion, I think it’s possible to penalise someone in the scheme if they choose to let out their unit as they wish but not completely restrict them in this manner.
"If someone opts to offer short-term lets on their unit, an additional levy could be charged because of the increased turnover of tenants in their unit,” says Bauer.
Gauteng affordable homes launched
An innovative joint venture between an estate agency, construction group and investment company would build a total of 18 000 housing units annually. Some R5 billion annually will be spent by the consortium into affordable housing projects nationally in a bid to broaden home ownership and wealth development.
Acutts Motlekar, a joint venture between the Acutts Property Group and African investment holding company Motlekar Holdings, in conjunction with construction company Group Five as the building contractor and development manager aims to build 18 000 housing units to the market each year.
This conservatively translated into a R5 billion injection to the local economy with spin-offs and job creation expected in land surveying, architecture, building and construction, material delivery and administration.
Currently the initiative has the capacity to deliver 100 houses a day, a mobilisation that will also promote employment in the selling, mortgage origination and property transfer value chain.
Ways to reduce Capital Gains Tax
Capital Gains Tax is not nearly as “scary” as it is perceived to be but an awareness of the calculation of your capital gains at the time of buying a property should be considered.
This is according to Lanice Steward, MD of Anne Porter Knight Frank who says if the property is owned jointly by a husband and wife and, and for example, the wife does not work, it could be beneficial to change the ownership shareholding to 70/30 or 80/20 of the property in favour of the non-income earner.
This would mean that at the time of selling the property, the greater portion of the tax burden will fall in the wife or non-income earner’s ownership and in all likelihood be below the tax threshold, and would mean that there is no Capital Gains Tax payable.
Another thing to remember when you buy a home, says Steward, is to remember to keep a record of all the documentation, i.e. the invoices and records of payments for any improvements done to the property. "There is an important distinction between improvements and maintenance because you cannot deduct maintenance but you can deduct for improvements made.”
Johannesburg city property revival
With a rejuvenation programme well underway and transport nodes such as the recently opened Gautrain Park station close at hand, the residential property sector of the Johannesburg city centre continues to enjoy a strong revival.
This is according to Rupert Finnemore, Pam Golding Properties (PGP) joint area manager, Hyde Park office in Gauteng. He says that the ‘City of Gold’ has residential properties available from the lower end through to the higher end of the market, depending upon where in the city you choose to reside. Whatever the case may be, residential property in Johannesburg can represent excellent value for money, he says.
The city has put enormous resources into turning the city centre around after there was a flight of capital to the northern suburbs in the 1990s, says Finnemore. “With crime levels down and occupancy rates up, the results of this urban renewal effort are highly positive and the area is enjoying a new vibrancy."
He says there is greater confidence in the district, which is attracting considerable investment and many apartment blocks in areas such as Braamfontein and Marshalltown have been, or are in the process of being, revamped.
Saving tips: Pay more into home loan
It came as some relief to homeowners when the prime interest rate was cut by 50 basis points to just 8.5% last month. Although this provides a welcome reduction in the monthly costs of repaying a mortgage, home loan originator ooba, say it would be wise for people to keep their repayment levels unchanged.
“When the interest rate gets cut, it's easy to start thinking of ways to spend those extra rands, but in reality, it's never a bad idea to invest that money in your home loan,” says Craig Deats, ooba sales director. “A mortgage is a big financial burden and every effort should be made to reduce it.”
While a couple of hundred each month may not seem like enough to make a dent in a large mortgage, over time the savings can be significant. Deats shows that the maths bears this out. On a R1 million home loan with an interest rate of 9%, the monthly repayment is R8 997 over 20 years. When the interest rate is reduced to 8.5%, the monthly repayment is R8 678 – a reduction of R319.
If you were to take that R319 and keep paying it into your home loan account every month from the start, you would reduce both the total interest charged and the term of payment significantly, he says. “You would save yourself R109 835 on the total amount repaid, and would finish paying off the mortgage in just over 18 years.”