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Property 24/10 - 298

7 April 2016

IEASA Western Cape To host workshop on evictions
The Institute of Estate Agents, Western Cape, will host a Legal Property Rental and Evictions workshop on Tuesday, 12 April 2016 at their training centre in Sheldon Way, Pinelands, Cape Town according to Annette Evans, general manager of the Institute, Western Cape, who says the half-day workshop will be run by Cilna Steyn, a specialist in this field and author of ‘Property Rental and Eviction - The Landlord’s Guide’.

Steyn’s practice is based in Johannesburg, and her book is available to purchase through IEASA for R165.

Evans says this workshop is the second in a five part series and will provide valuable insight for agents, equipping them to support and assist landlords dealing with a tenant they have to evict.
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Buying a home in a trust no longer such a wise choice
With the changes proposed in the latest budget presented by Minister of Finance Pravin Gordhan, where capital gains tax (CGT) charged on homes bought in trusts has increased exponentially, as well as certain assets now having to be listed in the founder of the trust’s estate - the question arises whether buying a home in a trust is still a viable option and whether this vehicle is the right one to look after the asset.

So says Lanice Steward, president of the Institute of Estate Agents of South Africa, who explains that over the years, different tax implications have been applied to trusts, with the latest being an increase from 27.3% of the gain to 32.8%.

The formula for calculating capital gains tax as set out in the tax legislation is quite complicated but basically comes to a percentage of the total profit or gain made by a tax payer. The previous rate for natural persons was 13.7%, 18.6% for companies and close corporations and for trusts it was 27.3%. From 1 March 2016, the new rate is: 16.4% for natural persons, 22.4% for companies and close corporations and 32.8% for trusts.
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Property investors in Africa: Managing currency volatility
While growth has slowed in many commodity linked markets in Africa, non-commodity driven markets, particularly in East Africa, have continued to perform well.

Although funding challenges are expected to persist this year for property investors and developers, growth in property development is likely to continue in many markets, if appropriate funding structures are used to manage some of the current hurdles, such as weaker local currencies.

“Developers will need to do robust feasibilities in order to understand how economic conditions can affect their returns over time and they also need to consider buffering themselves against potential risks such as currency volatility by utilising appropriate funding structures,” says Gary Garrett, Head of Real Estate Finance at Standard Bank.
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Four credit record must-knows for buying property
Getting a grip on your credit record, one of the critical building blocks of your financial health, is vital to help you get into the property market according to Tim Johnson, Sales Director/Licensee for Seeff Dolphin Coast, who says having no credit record can be just as bad as having a poor credit record as banks and lending institutions need to be able to check to see how you manage your debt.

Furthermore, he says the quality of your credit record determines the interest rate you are likely to get when applying for a home loan or vehicle finance.
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Does foreign buying push up property prices for locals?
Global investment in some of the world’s major cities has been blamed for pushing up house prices for ordinary residents, but research by Savills, strategic partner of Pam Golding Properties, suggests this is not the case. Instead, the signs are that international investment pushes up prime property values rather than ordinary mainstream values.

Of 12 cities surveyed, the most expensive for mainstream residential property are Hong Kong, New York and London. Both New York and Sydney have seen high price rises in recent years, despite restriction on foreign ownership.

Mainstream properties generally have, on average, seen growth of 58% across 12 cities surveyed since December 2008. Most of this growth has been associated with economic recovery in the second half of that period, with 33% occurring between December 2011 and June 2015.
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Multi stakeholder group to tackle estate agent issues
The Institute of Estate Agents of South Africa (IEASA), as a member of a multi-stakeholder group reports that they, with REBOSA, NPF, SAPOA, and NAMA, as representatives of the real estate industry, have joined forces to work together with the Estate Agency Affairs Board to sort out the issues that have confronted agents up to now.

This is the word from Lanice Steward, president of IEASA, who says there are various issues currently being addressed, namely, Fidelity Fund Certificates (FFCs), e-learning and continuous professional development (CPD).

If agents have not yet received their FFCs, they need to be aware that if the payment was made on the 31 October 2015 for their 2016 certificate, the payment might only have reflected in the EAAB’s bank account on the 1 November. In this case, the system would have recognised the payment as a late payment and would automatically have triggered a penalty due.
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Check voting rights of attendees at AGMS
When it comes to voting time at the AGM of a sectional title scheme, the trustees must be sure that all those who are voting do, in fact, have the right to vote.

This is according to Michael Bauer, general manager of the property management company IHFM, who says this is to avoid situations where decisions are made and resolutions passed, but it is found later that many of the people who voted did not do so legally.

The trustees should check the ownership of units and have an updated attendance register from the Deeds Office before each general meeting. The other thing trustees need to establish is how each section is owned and work out the participation quota (PQ) factor for each section before the meeting in order to work out their voting rights.
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