Monthly Archives: September 2014

Capital gains tax and the sale of a property

A1blCapital Gains Tax was introduced on 1 October 2001. Capital Gains Tax is payable on the profit a seller makes when disposing of his property.

What is meant by Capital Gain?

A person’s capital gain on an asset disposed of is the amount by which the proceeds exceed the base cost of that asset.

What is base cost?

The base cost of an asset is what you paid for it, plus the expenditure. The following can be included in calculating the base cost:

  1. The costs of acquiring the property, including the purchase price, transfer costs, transfer duty and professional fees e.g. attorney’s fees and fees paid to a surveyor and auctioneer. 
  1. The cost of improvements, alterations and renovations which can be proved by invoices and/or receipts. 
  1. The cost of disposing of the property, e.g. advertising costs, cost of obtaining a valuation for capital gains purposes, and estate agents’ commission. 

How was base cost of assets held calculated before 1 October 2001?

If the property was acquired before 1 October 2001 you may use one of the following methods to value the property:

  1. 20% x (proceeds less expenditure incurred on or after 1 October 2001). 
  1. The market value of the asset as at 1 October 2001, which valuation must have been obtained before 30 September 2004. 
  1. Time-apportionment  base cost method. Original cost + (proceeds – original cost) x number of years held before 1 October 2001 divided by the number of years held before 1 October 2001 + number of years held after 1 October 2001). 

How is Capital Gains Tax paid?

Capital Gains Tax is not a separate tax from income tax. Part of a person’s capital gain is included in his taxable income. It is then subject to normal tax. A portion of the total of the taxpayer’s capital gain less capital losses for the year is included in the taxpayer’s taxable income and taxed in terms of normal tax tables.

How is Capital Gain calculated?

If you are an individual, the first R30 000 of your total capital gain will be disregarded. Then 33.3% of the capital gain made on disposal of the property must be included in the taxable income for the year of assessment in which the property is sold. When the property is owned by a company, a close corporation or an ordinary trust, 66.6% of the capital gain must be included in their taxable income.

Primary residence and Capital Gains Tax

As from 1 March 2012 the first R2 million of any capital gain on the sale of a primary residence is exempted from Capital Gains Tax. This exemption only applies where the property is registered in the name of an individual or in the name of a special trust. The property should furthermore not exceed 2 hectares. If the property is used partially for residential and partially for business purposes, an apportionment must be done.

If more than one person holds an interest in a primary residence, the exclusion will be in proportion to the interest held by each party. For example, if you and your spouse have an equal interest in the primary residence, you will each qualify for a primary residence exclusion of R1 million. You will also be entitled to the annual exclusion, currently R30 000.

This article is a general information sheet and should not be used or relied on as legal or other professional advice. No liability can be accepted for any errors or omissions nor for any loss or damage arising from reliance upon any information herein. Always contact your legal adviser for specific and detailed advice.

Kapitaalwinsbelasting en die verkoop van ‘n eiendom

A1blKapitaalwinsbelasting het in werking getree op 1 Oktober 2001. Kapitaalwinsbelasting is betaalbaar op die wins wat ‘n verkoper maak wanneer sy eiendom verkoop word.

Wat beteken Kapitaalwins?

Die bedrag waarmee die opbrengs van ‘n verkoping van ‘n bate die basiskoste oorskry, staan bekend as die kapitaalwins.

Wat is basiskoste?

Die basiskoste van ‘n bate is die bedrag wat vir die bate betaal is plus uitgawes wat aangegaan is. By die berekening van basiskoste kan die volgende koste ingesluit word:

  1. Die koste vir die verkryging van die eiendom, wat insluit die koopsom, oordragkoste, hereregte en professionele fooie van o.a. die prokureurs, die landmeter en die afslaer. 
  1. Die koste van verbeterings, veranderinge en opknapping van die eiendom waarvoor daar fakture en/of kwitansies as bewys moet wees. 
  1. Die koste van vervreemding van die eiendom, o.a. advertensiekoste, die koste verbonde aan die verkryging van ‘n waardasie vir kapitaalwinsdoeleindes en eiendomsagente-kommissie. 

Hoe word die basiskoste bereken in gevalle waar die eiendom voor 1 Oktober 2001 verkry is?

Indien die eiendom voor 1 Oktober 2001 verkry is, kan een van die volgende metodes gebruik word om die waarde van die eiendom te bereken:

  1. 20% x (opbrengs minus uitgawes aangegaan op of na 1 Oktober 2001) 
  1. Die markwaarde van die eiendom soos op 1 Oktober 2001 welke waardasie bekom moes wees voor 30 September 2004. 
  1. Tydverdeling-basiskoste metode. Die oorspronklike koste + (opbrengs – oorspronklike koste) x aantal jare wat eiendom gehou is voor 1 Oktober 2001 gedeel deur die aantal jare gehou voor 1 Oktober 2001+ aantal jare gehou na 1 Oktober 2001). 

Hoe word Kapitaalwinsbelasting betaal?

Kapitaalwinsbelasting is nie ‘n belasting wat addisioneel tot inkomstebelasting betaalbaar is nie. ‘n Gedeelte van ‘n persoon se kapitaalwins word ingesluit in sy belasbare inkomste. Dit sal dan onderhewig wees aan die betaling van normale inkomstebelasting. ‘n Gedeelte van ‘n belastingbetaler se kapitaalwins minus sy kapitaalverliese vir ‘n spesifieke jaar word ingesluit in die belastingbetaler se belasbare inkomste en is as belasting betaalbaar volgens die normale inkomstebelastingtabelle.

Hoe word kapitaalwins bereken?

In geval van ‘n individu word die eerste R30 000 van die totale kapitaalwins buite rekening gelaat. Daarna moet 33.3% van die kapitaalwins wat verkry is by die vervreemding van ‘n eiendom, ingesluit word in die belasbare inkomste van die persoon vir die jaar waarin die eiendom vervreem is. Waar ‘n maatskappy of beslote korporasie of ‘n gewone trust ‘n eiendom besit, word 66.6% van die kapitaalwins ingesluit by die belasbare inkomste.

Primêre eiendom en Kapitaalwinsbelasting

Vanaf 1 Maart 2012 is die eerste R2 miljoen kapitaalwins op die vervreemding van ‘n primêre eiendom uitgesluit van die betaling van kapitaalwinsbelasting. Hierdie uitsluiting is net van toepassing indien die eiendom geregistreer is in die naam van ‘n individu of ‘n spesiale trust. Die grootte van die eiendom moet ook nie 2 hektaar oorskry nie. As die eiendom gedeeltelik vir woondoeleindes en gedeeltelik vir werksdoeleindes gebruik word moet ‘n proporsionele  verdeling gedoen word.

Wanneer verskillende individue aandele in ‘n primêre eiendom besit, sal die uitsluiting proporsioneel wees tot die aandeel wat elkeen besit. Byvoorbeeld wanneer eggenote wat getroud is buite gemeenskap van goedere saam die primêre eiendom besit, sal elkeen kwalifiseer vir die uitsluiting van R1 miljoen. Elke eggenoot sal verder geregtig wees op die jaarlikse uitsluiting wat tans R30 000 beloop.

Hierdie is ‘n algemene inligtingstuk en moet gevolglik nie as regs- of ander professionele advies benut word nie. Geen aanspreeklikheid kan aanvaar word vir enige foute of weglatings of enige skade of verlies wat volg uit die gebruik van enige inligting hierin vervat nie. Kontak altyd u regsadviseur vir spesifieke en toegepaste advies.

Estate agents commission

A2blSelling a home is one of the biggest financial decisions a person can make and an estate agent, to whom commission will be payable, is usually involved in this process.

A problem that frequently occurs in practice and which is not easy to solve is whether an agent was in fact instrumental in bringing about the sale of the property. It could happen that an agent introduces a prospective buyer, that negotiations for the sale do not succeed and that another agent succeeds in concluding the agreement. It is common practice for more than one agent to be instructed to find a purchaser. It could even happen that a seller is held responsible for paying commission to two agents.

An estate agent is not an agent in the strict sense of the word.  His “mandate” is normally to find a suitable purchaser for the seller’s property and not to sell on behalf of the seller. This is, however, not a contract in the usual sense where parties undertake reciprocal obligations. In fact, the agent is not obliged to perform his mandate. An estate agent will only be entitled to commission if he has a mandate from the seller; without the mandate he is not entitled to commission, even though he might have been the effective cause of the transaction.

An estate agent will be considered to be the effective cause of the transaction when:

  • he has introduced a willing and financially able buyer to the seller;
  • a binding contract has been concluded between the parties; and
  • the transaction takes place at the stipulated price or at a price acceptable to the seller. 

When several estate agents are involved in introducing the buyer to the seller it might be difficult for the court to determine which agent was the effective cause. For instance, when estate agent A introduces the buyer to the seller but the buyer later purchases the property through estate agent B after B has persuaded the seller to drop the price. Or estate agent A may have a sole mandate, but estate agent B introduced a willing and able buyer. The seller could then be liable for both estate agents’ commission. A sole mandate usually stipulates that the agent is entitled to commission if the property is sold during the currency of the agreement, even if another agent introduced the buyer.

In another matter a prospective buyer was introduced and the house was inspected. The price was considered too high. A few months later the purchaser noticed that the house was still in the market. He then bought the property without intervention from the agent at a slightly lower price than the earlier rejected price. The estate agent was held to be entitled to his commission.

How much commission is an estate agent entitled to? The average commission ranges up to 7.5%, but there are no regulations as to how much commission an estate agent should be paid per sale. The commission should be discussed by the parties when negotiating the mandate.

Sole mandates that are given to estate agents are regulated by the Consumer Protection Act. The duration of the agreement may not exceed 24 months. The seller has the right to cancel the agreement by giving 20 business days’ notice in writing. If the mandate is not terminated by the seller on the expiry date it will automatically continue on a month-to-month basis.

Seller, be wary of these pitfalls when selling your property – they could be very costly.

This article is a general information sheet and should not be used or relied on as legal or other professional advice. No liability can be accepted for any errors or omissions nor for any loss or damage arising from reliance upon any information herein. Always contact your legal adviser for specific and detailed advice.

Eiendomsagente-kommissie

A2blDie verkoop van ‘n huis is een van die grootste finansiële besluite wat ‘n mens kan neem en ‘n eiendomsagent, aan wie kommissie betaalbaar sal wees, is gewoonlik betrokke in hierdie proses.

‘n Probleem wat dikwels in die praktyk voorkom en nie maklik is om op te los nie, is die vraag of ‘n eiendomsagent in werklikheid ‘n instrumentele rol gespeel het in die verkoop van die eiendom. Dit kan gebeur dat ‘n eiendomsagent ‘n voornemende koper bekendstel, dat onderhandelinge vir die verkoop nie slaag nie en dat ‘n ander eiendomsagent dan daarin slaag om ‘n ooreenkoms te sluit. Dit is algemene praktyk dat daar aan meer as een eiendomsagent opdrag gegee word om ‘n koper te vind. Dit kan selfs gebeur dat ‘n verkoper verantwoordelik gehou word vir die betaling van kommissie aan twee eiendomsagente.

‘n Eiendomsagent is nie ‘n agent in die streng sin van die woord nie. Sy “mandaat” is gewoonlik om ‘n geskikte koper vir die verkoper se eiendom te vind en nie om die eiendom namens die verkoper te verkoop nie. Dit is egter nie ‘n kontrak in die gewone sin waar partye onderneem om wedersydse verpligtinge na te kom nie. Die eiendomsagent is nie verplig om sy mandaat uit te voer nie. ‘n Eiendomsagent sal slegs geregtig wees op kommissie as hy ‘n mandaat het van die verkoper; sonder die mandaat is hy nie geregtig op kommissie nie, selfs al was hy die effektiewe oorsaak van die transaksie.

‘n Eiendomsagent word beskou die effektiewe oorsaak van ‘n transaksie te wees wanneer:

  • hy ‘n koper bekendstel wat gewillig en finansieël daartoe in staat is om die eiendom van die verkoper te koop;
  • ‘n bindende kontrak tussen die partye gesluit word; en
  • die transaksie plaasvind teen die vasgestelde prys of ‘n prys wat vir die verkoper aanvaarbaar is. 

Wanneer meerdere eiendomsagente betrokke is by die bekendstelling van die koper aan die verkoper kan dit moeilik wees vir die hof om te bepaal watter agent die effektiewe oorsaak van die transaksie was. Byvoorbeeld, in die geval waar eiendomsagent A die koper aan die verkoper bekendstel, maar die koper later die eiendom koop deur bemiddeling van eiendomsagent B, nadat B die verkoper oorreed het om die koopprys te verminder. Of eiendomsagent A kan ‘n alleenmandaat hê, maar eiendomsagent B het ‘n koper wat gewillig en finansieel in staat is om te koop. Die verkoper kan dan verantwoordelik wees vir altwee eiendomsagente se kommissie. ‘n Alleenmandaat bepaal gewoonlik dat ‘n eiendomsagent  geregtig is op kommissie indien die eiendom verkoop word tydens die duur van die ooreenkoms, selfs al het ‘n ander eiendomsagent die geskikte koper gevind.

In ‘n ander geval is ‘n voornemende koper bekend gestel en die huis besigtig, maar was die prys te hoog. ‘n Paar maande later het die koper gesien dat die huis nog in die mark is. Hy het die eiendom gekoop, sonder enige bydrae van die agent, teen ‘n effens laer prys as die vroeëre prys. Daar is deur die hof bevind dat die eiendomsagent geregtig is op sy kommissie.

Op hoeveel kommissie is ‘n eiendomsagent geregtig? Die gemiddelde kommissie is gewoonlik 7.5%, maar daar is geen regulasies wat bepaal hoeveel kommissie ‘n eiendomsagent per transaksie betaal moet word nie. Die partye moet die kommissie bespreek tydens die onderhandelinge oor die mandaat.

Alleenmandate wat aan eiendomsagente gegee word, word gereguleer deur die Wet op Verbruikersbeskerming. Die ooreenkoms mag nie langer as 24 maande duur nie. Die verkoper het die reg om die ooreenkoms te kanselleer deur 20 werksdae skriftelike kennis te gee. As die mandaat nie op die vervaldatum deur die verkoper beëindig word nie, sal die mandaat outomaties voortgaan op ‘n maand-tot-maand basis.

Verkoper, wees versigtig vir hierdie slaggate wanneer jy jou eiendom verkoop – hulle kan jou duur te staan kom.

Hierdie is ‘n algemene inligtingstuk en moet gevolglik nie as regs- of ander professionele advies benut word nie. Geen aanspreeklikheid kan aanvaar word vir enige foute of weglatings of enige skade of verlies wat volg uit die gebruik van enige inligting hierin vervat nie. Kontak altyd u regsadviseur vir spesifieke en toegepaste advies.