Please contact our Property24 Support Team for further assistance. Registering your property in a company allows you to, atthe time of acquisition of the immovable property, sign the agreement of sale on behalf of a company “to be formed”. When a decision is made to buy a property as a buy-to-let-investment, it is important to consider and plan what sort of strategy you, as the property owner, have in owning the property and then choose whether to own it outright or to register it in the name of a company or a trust. ... which is normally done through an estate agent. However, a very important, yet unfamiliar, requirement concerning properties registered in the name of a company has been highlighted by attorney firm De Beer & Claassen: “All companies and close corporations are required by law to submit their annual returns with the Companies and Intellectual Properties Commission (CIPC) within 30 days of the anniversary date of its incorporation. Estate agents in South Africa must register with the Estate Agency Affairs Board . But transactions involving the purchase by a legal entity such as a company, trust, or close corporation are dealt with slightly differently. How to get the ball rolling to start your own property business The first thing you need to consider when starting your own property business is the type of ownership to go with. The IGrow team’s key objective is to help ordinary South Africans achieve financial freedom through property investing. A verification email is on its way to you. Non-residents’ investments are not subject to South African tax. Your ooba Home Loans finance expert will advise you on all the paperwork required for your particular circumstances. Our business model is subscription based, aimed at estate agents, rental agents, developers and commercial agents. more. 7 sports cars you can buy in South Africa … In a CC, the owners of the company are referred to as members. Failure to do so will result in the CIPC assuming that the company or close corporation is no longer doing business or is not intent on doing business in the near future. For the best browsing experience, update to the latest Version of Internet Explorer or try out Google Chrome or Mozilla Firefox. There are pros and cons to buying property in a trust so it is important to have a clear understanding of both before committing to this type of ownership.. The downside of this method is that there is a higher rate of transfer duty and CGT payable than by individuals. Ignorance of the law is no excuse, and you need to be aware of the requirement for submitting annual returns with the CIPC to avoid de-registration of your company.”. What they lack is the basic information to guide them through the necessary steps to follow to accomplish this. Van Deventer says that STBB attorneys explain these different arguments in detail on their website: The decision as to which entity to buy your property in is a complicated legal one, it is highly recommended that the purchaser consults an attorney prior to signing an agreement of sale in order to obtain expert advice, Van Deventer says. Speak to a tax advisor on the best entities for buying a property and how you can save tax on your rental income. How to buy property without a home loan It is important that there is more than one way to go about purchasing a property in South Africa, you even have options when it comes to the deposit. As with any major financial decision, you should seek advice from an experienced adviser who will be able to analyse your situation and offer advice and guidance. Source: http://www.property24.com/articles/buying-property-in-a-company/20782. Zevenwacht Lifestyle Estate on the Stellenbosch Wine Route, has launched 10 independent living retirement apartments at the limited release price of R994 900 - with no transfer duties payable. Annual financial statements must also be submitted. Buying property through a company can be complicated! Clearly, if you ever get sued or you're in business, you have exposure - buying a property is a major purchase. As with any major financial decision, you should seek advice from an experienced adviser who will be able to analyse your situation and offer advice and guidance. Don’t put all your eggs in one basket How to buy a car under your business’s name. A trust is a legal entity created by a trust founder that can be used to purchase and own property. “While the cost of starting a trust can be significant, purchasing a property through a trust has certain advantages that many feel outweigh the cost,” says Adrian Goslett, Regional Director and CEO of RE/MAX of Southern Africa. Non-residents buying property in South Africa should remember that it is advisable to have a separate will in South Africa for their South African assets. According to the firm, a company or close corporation may be referred for deregistration in the following circumstances: De Beer & Claassen emphasises that non-compliance with the submission of annual returns can accordingly lead to de-registration of a legal entity without consent of the members or directors of such a legal entity. 4. Get R1.5 million funding for your business in hours. According to Wedge, one of the major benefits of buying property via a trust is separation of ownership. The Act makes provision to apply for reinstatement of a company, however, this is a costly and time-consuming exercise and needs to be managed by an attorney. Receive property investment opportunities and investment news directly to your inbox. Knowledge is power and asking your estate agent the right questions could save you a great deal of money and heartache in the long run.. It's a large acquisition, lots of costs involved, so if you are in the wrong structure, it's not really easy to move the property into the appropriate structure if you made the wrong choice. We strongly urge you to update to a. We welcome you to a new way of thinking about retirement, money and investing in property. One person who believes in this strategy is Jason Lee, the best-selling author of Making Money Out of Property in South Africa, and two other property books. You can use it for transporting products, going to client meetings, and for your staff to get to and from work if their own transportation is not available. South Africa has one of the most sophisticated and accurate systems of property registration in the world. As ever, when buying property in a foreign country, it is always best that you seek out reputable, English speaking representatives (legal, property, engineering etc.) In South Africa, the Western Cape province continues to outperform all other areas, with Cape Town remaining the most lucrative city in … The IGrow Wealth Group provides services that include education in property investment, financing, risk management, accounting, structuring, the administration of trusts, rental management and financial planning. Failure to do so will result in the CIPC assuming that the company or close corporation is no longer doing business or is not intent on doing business in the near future. 1. “It gives an individual the opportunity to invest in a range of properties through the purchase of stock. A good option is to open a close corporation (CC). According to the firm, a company or close corporation may be referred for deregistration in the following circumstances: De Beer & Claassen emphasises that non-compliance with the submission of annual returns can accordingly lead to de-registration of a legal entity without consent of the members or directors of such a legal entity. Knowledge is power and asking your estate agent the right questions could save you a great deal of money and heartache in the long run.. This could have been avoided if you were legally compliant, Van Deventer explains. Having a company car can be highly beneficial for your business. Perhaps you made the decision to buy a property in the name of a company registered with the Companies and Intellectual Properties Commission (CIPC). Guarantor: John Smith (Joan isn’t required to be a guarantor as she’s not a director). While it has its risks, like any other strategy, purchasing property to rent out is a sound investment choice whose benefits far outweigh its shortcomings. They also pay a comparably high CGT, with an inclusion rate of 50%, and an income tax rate of 28%, which translates into an effective CGT rate of 14%. Annual financial statements must also be submitted. But you might not know exactly how to buy a car under your business’s name. The location is also a determining factor in how long a property takes to sell. Upon voluntary application by the company / close corporation itself. The onus and responsibility is fully on you as the director of the company ((Pty) Ltd) or as a member of the close corporation (CC) to ensure your company’s annual tax returns have been submitted on time. This then goes to the seller for approval. If they buy an investment property for the company, the loan would be setup as follows: Borrower: ABC Pty Ltd. Mortgagor: ABC Pty Ltd (ABC Pty Ltd is the owner of the investment property). Riaan van Deventer, Head of Real Estate at Engel & Völkers Southern Africa, urges all homeowners to whom this requirement would apply to take note: “Don’t always presume your auditors will bring this to your attention or submit these annual returns. Many property owners opted for this route in recent years so that they could use the property to generate rental income, which in turn would be ploughed back into the business account, or possibly even to protect it from creditors. The onus and responsibility is fully on you as the director of the company ((Pty) Ltd) or as a member of the close corporation (CC) to ensure your company's annual tax returns have been submitted on time. … Property funds buy you a stake in real estate companies listed on … Visa requirements If you are looking to invest in property or starting your own buy-to-let portfolio and running it as a really profitable business, then you’ve come to the right place. They also cannot guarantee that the original name has not been taken by new owners, and this can encumber the whole process of reinstatement even further. Legislation protects non-paying tenants, so it’s difficult to vacate your premises if your occupants can no longer keep up with rental payments. 10 of the most frequently asked questions by foreigners buying property in South Africa. Follow the link in the email to complete the registration process. “A trust is considered a legal entity, not a legal persona or juristic person per se and best described as a legal relationship created by a founder by placing assets under control of trustees,” he explains. The estate agent requests a formal letter confirming details of your offer (which can also include prospective completion dates). Substantial tax advantages can be gained by purchasing South African property through a company… 18 questions to ask your estate agent that will save you a great deal of heartache and money in the long run. Article summary. 18 questions to ask your estate agent that will save you a great deal of heartache and money in the long run. Many potential investors would wish to buy property in other countries. Riaan van Deventer, Head of Real Estate at Engel & Völkers Southern Africa, urges all homeowners to whom this requirement would apply to take note: “Don't always presume your auditors will bring this to your attention or submit these annual returns. The more supporting documents you have at the ready, the smoother – and quicker – your bond application process will be. Legislation protects non-paying tenants, so it’s difficult to vacate your premises if your occupants can no longer keep up with rental payments. Choose flats over houses. 4. Agents receive a certificate annually that says they comply with the code of conduct. If annual returns are outstanding for more than 2 successive years. If buying a property through your limited company is something you have been considering, it is important to look at your long term goals as an individual, and as a company. Property appreciation also warrants annual rental increases. Registering your property in a company allows you to, atthe time of acquisition of the immovable property, sign the agreement of sale on behalf of a company “to be formed”. Upon voluntary application by the company / close corporation itself. Since companies don’t die, no estate duty is payable. However, it's not always easy to know what questions to ask. At the time when most people used this legal vehicle, it seemed like a wise decision as it saved transfer duties, it was easier to sell shares or membership and it was used to secure a legally sound investment. Things to consider when buying a property in South Africa. A Title Deed is assigned to every property. Do you want to know what it would be like to live it up in one of the most prestigious suburbs and estates in SA? How to buy property without a home loan It is important that there is more than one way to go about purchasing a property in South Africa, you even have options when it comes to the deposit. 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