Real Estate News - Why to buy property in South Africa?
The real estate market is seen by the government as being at the core of the country´s ongoing development and foreign investment should continue to be encouraged. Expanding tourism plus sporting event and conference hosting support this policy.
South African Rand (ZAR): 1 US Dollar at current rates buys 6.573 ZARs therefore property prices in ZARs are excellent value for money based on exchange rate. Exchange fluctuation lowest point in 2006 5.985 ZARs .
Economic climate: All the key economic indicators from business confidence to consumer confidence are at all time highs and the GDP growth of close to 5% is more than it has been for decades. New industrial policies will focus on high growth sectors such as automobiles, aerospace and BPO reducing dependence on commodities markets.
Capital Gains Tax (CGT): Disposal of property assets will immediately trigger, individual CGT at a rate of 10.5%. It is important to ensure that the base cost is not undervalued or that insufficient records fail to reflect true original market value. Extra expenditure directly related to buying, selling and improving homes are all attributable to the base cost including stamps duties, transfer, advertising, valuation and any development or maintenance costs.
Popular Investment areas: The Western Cape is the most popular area due to the scenery, but the Eastern Cape from Durban and beyond is gaining ground due to much more favourable pricing. Cape Town has been a long term favourite with foreign visitors as the surrounding 3,200 kilometres of coastline is picturesque, and largely turned into golf courses.
Price ranges: Prices on the Western Cape here are much higher than on the Eastern Cape. Prices for property close to Capetowns upmarket beaches reflect its popularity.
Budgetary guide: Standard houses: US $ 120,000 upwards. Luxury houses (single storey): US $160,000 and above. Luxury houses (double storey): US $ 500,000 and above. Standard apartments: US $ 70,000 and above. Luxury beachfront apartments Western Cape: US $ 186,000 396,000, Penthouses with own private swimming pools priced from US $ 762,000
Buying: The overall real estate market is traded through a limited number of estate agencies and private sales are infrequent. Vendor pays agents commission.
Service fees: federal transfer tax (5-8% of purchase price based on banded valuation), stamp duty (0% on mortgage bonds), inspections (0.2%) and legal charges (1-2%)
Mortgages: Non-residents may borrow up to 50% of the purchase price from a local bank approved by the S.A. Reserve Bank. Mortgages can be arranged to a maximum term of 20 years the average term is 10 years. Loans can be arranged in South African Rand, sterling or US dollars. The interest rate is based on the Prime Overdraft Rate
Article by: propertyworldme.com