Property is a popular investment vehicle in South Africa. Where property is held as trading stock (i.e. in the case of property traders), any gain or loss on disposal would be regarded as being of a revenue nature and taxable as such. In this scenario, any expenditure relating to the property dealings may be deducted for tax purposes on the basis that it is incurred in the production of taxable income.
Where property is acquired with the intention to hold it as a long-term investment, it would constitute a capital asset in the hands of the taxpayer and fall within the capital gains tax regime. Any proceeds on disposal would accordingly be subject to capital gains tax in the year in which the asset is disposed of. As mentioned above, the base cost of the asset is essentially the acquisition cost. However, certain additions to the base cost are permitted by the legislation, for example, estate agent’s commission, transfer duty and advertising costs to find a buyer or seller.
Property remains a tax-efficient investment where the investor is prepared to hold such property for a longer period, mainly since the inclusion rate of any capital gain realised is significantly lower than thjavascript:void(0)e marginal income tax rate. (Read More..)
Published courtesy of Blue Chip magazine
Thursday, 18 June 2009
Monday, 08 June 2009
Big estate agency group goes green
One of South Africa's biggest residential property sales organisations is getting its agents to recycle and curb wasteful consumption.
Announcement
RE/MAX of Southern Africa this week announced the launch of its RE/MAX Green initiative. RE/MAX franchises in South Africa will be designated green by adhering to prescribed green practices, such as recycling and methods of curbing potential wasteful consumption.
"The RE/MAX Green program was created to help consumers utilise the expertise of ‘Green Agents' in a world that increasingly values - and needs - eco responsibility," says Peter Gilmour, Senior Vice President International Franchise Sales for RE/MAX International.
"As part of its philosophy of premier community citizenship, RE/MAX is committed to the sustainability and environmental well-being of the communities in the more than 70 countries in which its real estate professionals work and live.
Internationally hundreds of agents participating in the RE/MAX Green program have completed one of five recognised eco-accreditation programs: NAR Green, EcoBroker, LEED-Accredited Professional, Accredited Green Agent and Accredited Green Broker.
Earlier this year RE/MAX of Southern Africa received recognition from the World Wide Fund for Nature (WWF) for the role it played as a corporate supporter during Earth Hour. RE/MAX pledged its communication infrastructures and mobilized its national franchise office network to raise awareness, and encourage South Africans to switch their lights off on 28 March for an hour, as a sign of solidarity against climate change.
Eskom reported that it recorded a drop of 400 MW of electricity during this time, which confirmed the participation of 1 million South Africans.
www.realestateweb.co.za
Announcement
RE/MAX of Southern Africa this week announced the launch of its RE/MAX Green initiative. RE/MAX franchises in South Africa will be designated green by adhering to prescribed green practices, such as recycling and methods of curbing potential wasteful consumption.
"The RE/MAX Green program was created to help consumers utilise the expertise of ‘Green Agents' in a world that increasingly values - and needs - eco responsibility," says Peter Gilmour, Senior Vice President International Franchise Sales for RE/MAX International.
"As part of its philosophy of premier community citizenship, RE/MAX is committed to the sustainability and environmental well-being of the communities in the more than 70 countries in which its real estate professionals work and live.
Internationally hundreds of agents participating in the RE/MAX Green program have completed one of five recognised eco-accreditation programs: NAR Green, EcoBroker, LEED-Accredited Professional, Accredited Green Agent and Accredited Green Broker.
Earlier this year RE/MAX of Southern Africa received recognition from the World Wide Fund for Nature (WWF) for the role it played as a corporate supporter during Earth Hour. RE/MAX pledged its communication infrastructures and mobilized its national franchise office network to raise awareness, and encourage South Africans to switch their lights off on 28 March for an hour, as a sign of solidarity against climate change.
Eskom reported that it recorded a drop of 400 MW of electricity during this time, which confirmed the participation of 1 million South Africans.
www.realestateweb.co.za
Tuesday, 02 June 2009
Oversupply sinks property market
HOUSE prices are continuing to decline, due to a sizeable oversupply that has built up in the residential market, FNB said yesterday.
Its latest house price index continued to decline in May to -11.3 percent year-on-year. This represented a deterioration on the revised -9.2percent rate of year- on-year decline recorded for April.
It was also the sixth consecutive month of year-on-year decline in the house price index, FNB said.
On a month-on-month basis, the rate of deflation was -3percent in May.
The deflation was a result of oversupply, with selling due to financial pressure being a key driver of supply, FNB added. “With South Africa officially now in recession, conditions in the South African economy are hampering the pace of residential demand growth despite a series of interest rate cuts having already taken place,” FNB property strategist John Loos said.
Domestic interest rates have now declined by 450 basis points since the start of rate cutting in December last year.
“This should bring some stimulus to a very credit-sensitive market such as the residential property market.
“However, unlike the 2003 aggressive interest rate cutting which took place in good global and local economic times, the current stimulus from interest rates is to a great extent offset by an economic recession which contains growth in household purchasing power,” Loos said.
As such, the expectation of nothing more than a very mild improvement in residential demand during 2009 continued, and with oversupplies still believed to exist on the market, house price deflation was expected to be around for most of 2009, Loos added.
“However, I believe that the worst year-on-year price deflation will show in the figures around mid-year, and that during the second half of the year we’ll begin to see the rate of decline subsiding,” Loos said.
He said at the Reserve Bank’s most recent interest rate meeting, governor Tito Mboweni had started to prepare the market for a possible pause in interest rate cutting, “so though all future interest rate decisions depend on how future economic events unfold, we should not expect too much in the way of interest rate cutting from here forward,” Loos said.
The Lightstone annual national house price inflation, meanwhile, dropped to -3.1percent in January based on Deeds Office transactions, according to the latest Lightstone House Price index also released yesterday.
Sapa and I-Net Bridge
www.thetimes.co.za
Its latest house price index continued to decline in May to -11.3 percent year-on-year. This represented a deterioration on the revised -9.2percent rate of year- on-year decline recorded for April.
It was also the sixth consecutive month of year-on-year decline in the house price index, FNB said.
On a month-on-month basis, the rate of deflation was -3percent in May.
The deflation was a result of oversupply, with selling due to financial pressure being a key driver of supply, FNB added. “With South Africa officially now in recession, conditions in the South African economy are hampering the pace of residential demand growth despite a series of interest rate cuts having already taken place,” FNB property strategist John Loos said.
Domestic interest rates have now declined by 450 basis points since the start of rate cutting in December last year.
“This should bring some stimulus to a very credit-sensitive market such as the residential property market.
“However, unlike the 2003 aggressive interest rate cutting which took place in good global and local economic times, the current stimulus from interest rates is to a great extent offset by an economic recession which contains growth in household purchasing power,” Loos said.
As such, the expectation of nothing more than a very mild improvement in residential demand during 2009 continued, and with oversupplies still believed to exist on the market, house price deflation was expected to be around for most of 2009, Loos added.
“However, I believe that the worst year-on-year price deflation will show in the figures around mid-year, and that during the second half of the year we’ll begin to see the rate of decline subsiding,” Loos said.
He said at the Reserve Bank’s most recent interest rate meeting, governor Tito Mboweni had started to prepare the market for a possible pause in interest rate cutting, “so though all future interest rate decisions depend on how future economic events unfold, we should not expect too much in the way of interest rate cutting from here forward,” Loos said.
The Lightstone annual national house price inflation, meanwhile, dropped to -3.1percent in January based on Deeds Office transactions, according to the latest Lightstone House Price index also released yesterday.
Sapa and I-Net Bridge
www.thetimes.co.za
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