The bullet points below provide a summary of the legal consequences of buying property or doing business in a Close Corporation (CC):
Other Tax Considerations:
No transfer duty is payable if the seller is registered for VAT (and the property is part of the operations for which the seller is registered), but VAT at the rate of 14% is payable. If the contract does not specify that the VAT is to be paid over and above the purchase price, then it is deemed to be included in the purchase price.
If the property is sold as a rental enterprise or as a going concern e.g. a guesthouse, the deed of sale must contain certain specific provisions and may be zero rated for VAT. This means that no transfer duty or VAT is payable. Please click on to the precedent contract for the purchase of commercial property under step 5.
If the purchaser registers for VAT, then the Vat (or the transfer duty) can be claimed back as an input credit in certain defined circumstances.
If a property investor does not acquire a property with the intention of holding it for an indefinite period or for rental purposes, but with the intention of selling it to make a profit, then SARS may well regard the investor as a dealer and levy income tax at the investor's tax rate on the profit. Capital gains tax will not apply if income tax is payable.
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"Fast-Forward Your Retirement Through Property" reviewed by Ian Mann
“You won’t believe what happened to me after I read Jason’s books. My life changed completely! I resigned from my fulltime Job for 25 years and now I’m fulltime property investor. I don’t have words but I sincerely would like to say thank you to Jason. For 25 years, I was sitting in that office for Public Service dreaming about nothing but now after 25 years, I can dream big dreams! Right now I’m in Namibia but I will try my level best to see Jason in person in the near future.”
- George Seibeb, Namibia
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“I would like to take this opportunity to complement you on your book 'Fast Forward your Retirement Through Property' - Absolutely outstanding, it contains so much excellent information in a very easy to understand and concise format. It will be my reference on my journey to financial freedom. Congrats” - Henry Hayes, reader
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