Welcome tax relief for bodies corporates

Body Corporates at sectional title schemes in South have been given some welcome tax relief through the Taxation Laws Amendment Act, which was promulgated by SARS in July of last year.

The Act states that all taxable income received by body corporates, i.e. income other than that derived from levies, will be granted a R50 000 exemption per annum.

According to Martin Bester, Regional Manager of Intersect Sectional Title Services, up till now, income earned by body corporates was subject to taxation at prevailing company rates. This included inter alia interest earned on investments and rental income.

“We have always encouraged the schemes we administer to build healthy cash reserves but these reserves were being eroded by the taxation that was payable on the interest earned. Now that the first R50 000 of such income is exempt from taxation, we are seeing a welcome relief for all schemes.”

”Building cash reserves, to meet unexpected expenses and allow for reasonable contingencies is sound practice. This ensures liquidity and, given our membership of the Estate Agency Affairs Board, it provides fidelity fund cover as well.”

“At Intersect we ensure that our client’s funds are invested at the best possible rates, so the returns were previously affected by the taxation. But interest earned on investments is not the only income that body corporate’s could earn, they might also derive income from source such as rentals, and this too will benefit from the exemption,” concludes Bester.

Intersect Sectional Title Services is a registered member of the National Association of Managing Agents [NAMA] and has signed and agreed to the prescribed code of conduct issued by the Association. Intersect is a subsidiary of Spire Property Group.

Regional Manager, Martin Bester, also represents the sectional title industry on the residential and sectional title committee of the South African Property Owners Association [SAPOA].

Article by: www.intersect.co.za