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Weekly Newsletter
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Friday, 04 July, 2008
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The FTSE 350 Real Estate Index of 23 stocks slumped about 24 percent in the second quarter to the lowest since August 2004. The biggest decliner was Quintain Estates and Development Plc, which plunged 58 percent. The index fell 1.1 percent today...
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| >> ‘Too soon’ to buy UK property |
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WITH reports of further significant residential property price declines expected in the UK, South African investors may wonder if this will present an excellent opportunity to buy property offshore. Ultimately that depends on whether the investor is taking a short- or long-term view on the residential property market there...
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| >> Standard Bank Property Gauge: Sizwe Nxedlana – property economist, Standard Bank |
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SIZWE NXEDLANA: No, no. We saw the median house price come down by -11.3% year-on-year. MONEYWEB: What's a "median" house price...
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| >> May Mortgage numbers and mortgage market overview - John Loos FNB |
The Mortgage market continued its slowdown in May, with year-on-year growth in the value of total mortgage loans outstanding slowing once again from 21.9% in April to 20.6% in May. Whilst it used to be fashionable to attribute the slowdown to the residential component of the mortgage market, these days it must be said that the slowdown is more broad-based. Indeed the residential mortgage market has the dominant influence on the overall weakening trend because of its sheer size, with residential mortgage loans accounting for about 80% of the total value of the country’s mortgage book. In April, year-on-year growth in residential loans recorded 20.8%, two percentage points down on the 22.9% of the previous month...
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| >> Home loan not for cars |
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Many consumers are making judgement errors when it comes to incurring debt and financing a car through your bond will only add to your woes...
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| >> Housing "Crash" reports are not realistic |
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Another senior executive in the residential property development, marketing and financing sector, Anthony Smook, MD of A Mortgage Loan, has come out with a statement that he is “mystified” by the negativity and pessimism of recent media reports on the industry. “I, for one, simply cannot understand on what facts the current gloomy outlook is based,” said Smook. “It seems to me that most people’s opinions on housing are the result of rumour and dinner talk...
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| >> If you are struggling to pay your bond consider contacting an NCA Debt Counsel |
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The vast majority of bond payers do not as yet know that the National Credit Act has made provision for debt counsellors who have the systems and the authority to help an over-indebted person (i.e. someone whose expenses are higher than his income) through his difficulties...
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| >> How to spot an ethical real estate company |
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So says Barry Davies, CEO of Chas Everitt International Franchising, who notes: “Most industry practitioners profess strict adherence to sound business ethics – and one would hardly expect less – but candidates may find it difficult to establish from a vision and mission statement whether a company will really match their own ethical standards...
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| >> Dreamworld film venture will catalyse property market |
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So says Marius Pretorius, principal of the ERA real estate franchise in Strand, who notes that all environmental, legal and financial arrangements for the venture have been completed and that civil works for the project are now under way...
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| >> “One and only” Kerzner Hotel takes shape at Cape Town |
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| >> Bruce Lee’s home not for sale |
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Millionaire philanthropist Yu Panglin, who bought the house for 850,000 Hong Kong dollars (109,000 US) in the 1960s, had invited bidders for the property, the South China Morning Post said...
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| >> News from - iafrica.com - SA's priciest properties |
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Offering panoramic views of Table Mountain or overlooking the beautifully bronzed bodies lying on the white, sandy beaches of Clifton, these homes inspire envy and admiration in equal parts...
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| >> Letters to the editor |
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HOW TO CALCULATE CGT ON THE SALE OF A PROPERTY
In the case of an interest in fixed property situated in South Africa, residents and non-residents are liable to CGT. Non-residents are also liable to CGT on the disposal of rights in property-owning companies, close corporations and trusts, in certain circumstances. The definition of ‘disposal’ includes not only sales but also various deemed disposals, the most important of which is the death of a natural person. When a taxpayer dies, he or she is deemed to have disposed of all assets at market value, thus triggering a potential capital gain. Exclusions include property left to a surviving spouse or to a qualifying Public Benefit Organisation. Where property is donated, capital gains tax arises, using the full market value as ‘proceeds’, unless the donation is to the taxpayer’s spouse or a qualifying Public Benefit Organisation.
CGT is in reality not a separate tax, but forms part of normal income tax. The taxpayer’s capital gain is determined by deducting the base cost of the asset from its proceeds. ‘Proceeds’ is the gross selling price of the property. ‘Base cost’ is the cost of the property or, alternatively, the value of the property at 1 October 2001 (where the asset was owned by the taxpayer as at this date – see below), plus various other costs, the most common of which are: the cost of improvements, transfer duty on purchase, valuation costs, conveyancer’s fees and advertising costs (to find a buyer). Contrary to popular belief, the cost of bond interest cannot be claimed where the property is sold, unless the property was used exclusively for business purposes and the interest was not claimed as a normal tax deduction.
Once the capital gain has been determined, the taxpayer deducts the primary residence exclusion (only where the taxpayer is a natural person and where the property was the taxpayer’s primary residence) of R 1.5 million (2009 amount) and the annual exclusion of R 16 000 (only where the taxpayer is a natural person – 2009 amount).
The result is multiplied by the taxpayer’s inclusion rate and included with the taxpayer’s other taxable income for the year. This gives rise to the following maximum effective rates of CGT:
Where the asset was owned by the taxpayer at 1 October 2001 (known as the ‘valuation date’), the value of the property at the valuation date can be determined in one of three ways: using an actual valuation as at this date, using the time-apportionment base cost formula or using 20 % of the proceeds as the value at valuation date. The taxpayer is free to choose whichever method gives the best result (where there is a capital gain).
A simple example of an application of the time apportionment formula is as follows:
EXAMPLE Say a property cost R 500 000 in September 1996 and was sold for R 2 million in June 2007. Selling costs amounted to R 100 000.
One takes the R 500 000 plus [(R 2 million less R 100 000) less R 500 000] * 6 / 12 = R 1.2 million. This is the valuation date value according to the time apportionment method. The ‘base cost’ of the property is then R 1.2 million plus the selling costs of R 100 000 equals R 1.3 million. It should be noted that in applying this formula, part of a year (before or after 1 October 2001) is treated as a full year.
If the seller is a non-resident, a withholdings tax is applied to the proceeds, at rates of either 5, 7.5 or 10 % of the proceeds, depending on whether the seller is a natural person, company (or CC) or trust, respectively. About David Warneke A true academic with entrepreneurial flair, David Warneke graduated with an Honours degree in Financial Accounting from the University of Cape Town. He also has a Graduate Diploma in Taxation and a Masters degree in Tax Law. After completion of his training contract, he opened his own practice in 1994. He joined Cameron & Prentice as Partner in 2007. His experience and expertise as a tax professional is of enormous value to the Cameron & Prentice team, staff and clients alike. David continues to uphold his interest in academia. He is currently Senior
Lecturer in Taxation at the University of Cape Town and co-author of a
text on taxation that is prescribed at most leading universities in South
Africa. |
| >> Focus on Caledon, Western Cape, South Africa |
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View Properties in Caledon
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| >> Property of the week |
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| >> BetterBond's tips to home buyers and sellers |
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Simple garden tips to improve the sale of your property
You’ve decided to put your house on the market, you’ve followed all the tips to improve the sale – you’ve de-cluttered all the rooms, the walls are painted in neutral colours and you’ve packed those personal photos and nick-knacks away. The outside of the house has been fixed up, all broken windows replaced and the gutters are clean. You’re almost ready for that first showhouse, but something still seems to be missing. Now you need to look at what you can do to improve the appeal of your garden. You can make your garden very attractive in a matter of a weekend, by creating an almost instant flowering garden and it doesn’t have to cost a fortune either. Visit your local nursery and buy some plants that are already flowering. No matter the season, keep the property free from litter. Take a look at the shrubbery; it should be neatly trimmed especially if it is blocking a clear view of the house. Walkways and driveways should be clean, the grass cut and the edges trimmed. Rake up the leaves and remove weeds from the plant or flower beds. Remove any tree limbs that are near or touching the roof. Right by your front door, use plants as a visual “welcome” sign. If your front door has an overhang, you could add some hanging baskets at eye level. Try to keep the colour arrangement identical on each side for a balancing and aesthetic effect. If you have steps in front of your entrance, place a small pot plant on each step at each end. Add a garden ornament or two. It’s easy to make your own attractive (and tasteful) garden ornaments. A weathered old bucket, basket, or half-barrel tilted on one side with flowers spilling out is a delightful way to decorate your garden. Petunias or other trailing flowers are especially pretty when planted this way. You can even create a planter from the kids’ old red wagon or small wheelbarrow. Put away your garden equipment and tools, or store them to one side as neatly as possible. Article by: Cheryl Marais – Direct Marketing Manager - Betterbond
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| >> Software at its best! |
If you would like to know more about the above features and benefits that CyberAgent offer, visit: www.cyberagent.co.za or email: sales@cyberprop.com |
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For Sale Property: To Rent Property: |
Vehicle
sales in June 2007 showed a 21.9% decrease when compared to sales
of June 2007. On a month-on-month there was also a decrease of 1.15%
with less vehicles sold in June 2008 than in May 2008 leaving the
month with the lowest sales rate in over four years.
July
1 (Bloomberg) -- UK real-estate stocks had their worst performance in
more than 20 years in the second quarter as property values dropped and
rents for new office leases fell for the first time in more than four
years.
The
R430m Dreamworld film studio development at Faure near Cape Town will
give the property market in surrounding areas a shot in the arm.
Construction
work on the Kerzner One and Only R1 billion Waterfront hotel and urban
resort, on which work began in June last year, is now 45% and the focus
is now moving from the concrete structure to the “vast number”
of finishing trades, the co-ordination of which will be an extremely challenging
task, says a spokesman for the architects, Dennis Fabian Berman Architects.
The anticipated completion date is June 2009...
Hong
Kong - The owner of Bruce Lee’s family mansion in Hong Kong has abandoned
his plan to sell the property and will consider turning it into a museum
celebrating the kung fu film legend, a report said.
Sought-after
by those at the very pinnacle of the social hierarchy, South Africa's
most expensive properties are everything you'd expect — extremely
luxurious and very private. Personal lifts, scurrying housekeepers, a
butler or three, spas and fully equipped home gyms are just some of the
humble pleasures that the distinguished owners of these homes have come
to expect.
Caledon,
capital of the Overberg, and one of the seven oldest towns in South Africa,
lies at the foot of the Klein Swartberg. It is known for its natural mineral
waters, hot springs and wild flower show...
