Pool together and save on tax
Prospective buyers in sectional title buildings or complexes have been given a sweetener in the form of a new government transfer duty cost exemption.
Shepstone and Wylie Attorneys said though there has been no fireworks in this year's Budget Speech which was tabled in Parliament on Wednesday by Finance Minister Trevor Manuel, there has been a welcomed tax relief for property investors involved in sectional title pool schemes.
The law firm said sectional title unit owners could apply for exemption of tax from the ownership in a share block if the property remained part of a rental pool scheme.
A pool system occurs when unit or flat owners group together and use one property management company to deal with the tenants.
Bridget Majola, an associate at Shepstone and Wylie, said instead of individual owners registering for VAT, the pool scheme manager would be liable for VAT payment, removing the burden from the owners.
Majola said the property owners would have to register in writing with the South African Revenue Services for the pool scheme to be treated as a separate business from them.
The exemption is also extended to investors in share blocks and time share schemes.