Search:  
Gauteng Business News
5673
VIEWS

Send  Share  RSS  Twitter  10 Feb 2010

PROPERTY: Tax Concessions Likely to ‘Release’ Upmarket Properties

 





Recent Gauteng Business News

The window for the transfer of properties held in trusts, companies or close corporations into private ownership is likely to generate a fresh flow of quality property stock on to the market.

Colleen Gray, MD of CENTURY 21 South Africa says this is the second time owners of such properties have been given a period of grace in this respect – and that it’s likely to be the last.

“The situation stems from the fact that historically there were tax and other advantages to holding property via various legal entities,” she points out.

“Those loopholes were closed but with a short period of grace during which the transfer could be made into private ownership without onerous costs. Surprisingly, many failed to take advantage of the concession. However there is a now a new period of grace, until 31 December, 2011.”

As tax expert Mathew Lester has pointed out, under the old system, the properties held via these entities could be sold without re-registering with the Deeds Office.

Transfer duty was avoided if the sale involved shares and there was no Capital Gains Tax (CGT) if the property was sold out of a company, followed by the company’s voluntary liquidation or de-registration.

That’s all changed, however, and today properties being sold by CCs and companies can attract tax charges of up to 22,7% inclusive of CGT and Secondary Tax on Companies (STC), while those being sold by a trust attract 20% CGT.

“The consequence of all this is that many properties held in this way have actually become less marketable than properties held privately, where CGT is calculated at only about 10%, Gray says.

“But with the transfer concession window, numerous properties that theoretically could not have realised their full market value may well come on to the market now – after they have been transferred to the shareholders or members of the company or CC that owns them, or in the case of a trust, to the person who funded the arrangement.

“And many of the affected properties are likely to be upmarket, as it has until now been advantageous for the wealthy with large estates to own them through entities such as trusts.”


 
 
 
study-it-onlinespaceacredecor-and-furniturejane-shonfeld
 
   
 
 
 
  Accomodation
Accommodation


Online Foreign Exchange
Foreign Exchange


Directory
Directory


Fax
Fax 2 Email


Finance
Finance


Furniture
Furniture


Casino
Online Casino


Restaurant
Restaurant


Auctions
Shop Online


Study IT
Study IT Online


Web design
Web Design


Weddings
Weddings


Work
Work from Home
 
 
 
 
 
Company News
 
 

 

© 2024 www.gbn.co.za. All rights reserved.

Daily Newsletter Subscription

 

Subscribe to the Gauteng Business News Daily News and information email (it's free).

Thank You
Your email address has been added.

Name:
Email Address: