End of moratorium on tax looms for residential properties held in trust
Iol - South Africa
If you hold residential property in a trust, a company or a close corporation, you have until December 31 to transfer it into your own name and avoid paying transfer duty, capital gains and other related taxes.
Pointing this out recently Ulrik Strandvik, a director of Gunstons Attorneys, says that paragraph 51A of the eighth schedule of the Income Tax Act stipulates that the transfer of properties held in close corporations, trusts and companies must be concluded no later than December 31 if they are to qualify for the tax exemptions.
The property only needs to be disposed of by that date - that is, the sale, or distribution of dividend in specie, or distribution to the beneficiary must take place before December 31 - but the transfer registration can take place later, Strandvik says.
Sectional Title units are not meant to house businesses
Chas Everitt - South Africa
For various reasons, more and more people want to work at home rather than commute to an office every day, but this can pose a problem if they live in a sectional title (ST) scheme, and they may need to get the permission of the body corporate before they go ahead.
That’s the word from Berry Everitt, MD of the Chas Everitt International property group, who says: “It is clear from the Sectional Titles Act that flats and townhouses, for example, are intended for residential use, and cannot be used as offices or places of business unless the owners of all the other units in that ST scheme agree in writing to a ‘change of use’.
“However, as in other ST matters, there is likely to be a high degree of subjectivity when it comes to deciding what actually constitutes a change of use.”
Not meant for business
Property Barometer - November 2012 House Price Index
FNB - South Africa
While the latest FNB House Price Index shows almost no price growth on a year-on-year basis, we continue to believe it possible that the declining trend in year-on-year growth in the FNB House Price Index will come to a halt very soon, being a bit “overdone” perhaps, and that price growth should settle in low single-digit territory.
However, at this stage, economic indicators make it difficult to see much improvement in housing market conditions in 2013, after having seen some improvement earlier this year to what has been a relatively “comfortable”2012 in the residential market.
Therefore, looking forward into 2013, while year-on-year price growth may pick up a little from the November low level, we are of the expectation that overall house price growth will be a little slower in 2013 than the average for the entire 2012.This is based on our view of the global and domestic economy, as well as on the level of household sector indebtedness.
Domestic economic growth has come under pressure of late. In the 3rd quarter, quarter-on-quarter seasonally-adjusted annualized growth in GDP (Gross Domestic Product) fell from 3.4% previous to 1.2%. Admittedly, this decline may have been exaggerated by the recent spate of industrial action, but it is also a function of a battling global economy.
FNB Property Barometer_November 2012 House Price Index