This is just my quick look at yesterday’s budget speech by Finance Minister Pravin Gordhan and particularly its impact on property.
I have included a brief Summary of the Budget in a clear and concise PDF version on my LinkedIn Page at http://za.linkedin.com/in/shepperson OR if you are not connected on LinkedIn, it is available via e-mail on request.
Whilst there would not appear to be any direct impact on the Property Investor or Property Owner, for example changes to the Transfer Duty or VAT Rates, there is nevertheless an impact by means of the following:
1. There are changes to Personal Income Tax that will affect investment properties held in the Owner’s own name.
2. There are changes to Dividends Tax that will affect those who invest through corporate entities and those who invest in listed property shares.
3. There are changes to taxation of small business for those who hold property in small Companies or Close Corporations.
4. There are changes to Capital Gains Tax.
I would like to focus on Capital Gains Tax for a moment. There has been a tax window for some time to transfer your private residence (including holiday homes) out of your Company or Close Corporation and into your personal name. There have been substantial reasons for doing so, and I would encourage you to read my slideshow “Moratorium Transfers” on my LinkedIn Page at http://za.linkedin.com/in/shepperson . This slideshow clearly demonstrates the massive savings to be gained. Please contact me if you want advice on how to take advantage of this opportunity.
Minister Gordhan has just given you TWO more reasons. Firstly, the rate at which Capital Gains Tax is being levied has been raised. Secondly, the threshold for exemptions has been increased.
BAA-BOOM … a double whammy saving for you if you choose to take advantage of it!!
I would also urge Estate Agents to contact me for advice on how you can use this to your advantage and make massive commission whilst simultaneously assisting your clients and securing client loyalty.