All of us sometimes come to a stage where we wonder about the value of our property and if we should sell and move on. Then most people base their own valuation on asking prices in the market, just to become very disappointed and disheartened when they cannot fetch the expected price for their property.
So, what is the solution when you want to know what a fair price for your property is?
The truth is not so simple, but it might be simpler than what you expect.
There are various methods of determining the value of property, some more popular than others, but I am of the opinion that one needs to look at the bigger picture, before making a final decision.
Fixed property is subject to a number of factors that have a direct influence on the price and value. Property is a very sensitive asset class in the investment market, where changes in the political, social and economic conditions play a huge role on the market conditions and the valuation of property. When compared to the inflation rate, property growth has over time outperformed inflation, leading to positive real return figures. This makes property a necessary and an attractive asset class when making investments and building an estate.
The sale of fixed property in South Africa is subject to either value added tax (VAT), or transfer duty. Both value added tax (VAT) and transfer duty in South Africa, forms part of governments tax income base, of which payment is compulsory in terms of the country’s tax laws.
Double taxation i.e. the payment of both value added tax (VAT) and transfer duty will not occur. It will either be value added tax (VAT) or transfer duty that is payable.
What is BEE and how does it affect business in South Africa?
Black Economic Empowerment (BEE) is a racially selective program implemented by the South African government whereby business participation by Whites in South Africa is being limited.
Legislation is implemented to redress the inequalities in the business sector brought about by the previous Apartheid System. The progressive implementation of the BEE System renders economic and employment privileges to previous disadvantaged groups, namely Blacks, Coloureds, Indians, and Chinese that are citizens of South Africa.
The BEE system gradually transfers employment and business opportunities to previously disadvantaged groups.