SHOWING ARTICLE 5 OF 40

High Yielding Rental Property In The Lower End Market

Category Advice

South Africa is always a popular choice among those who are seeking winter sunshine. The country has the advantage of being in the same time zone as the UK whilst boasting a much cheaper living cost. House prices here are much cheaper than in the UK and USA and a new tax relief in the high yielding rental property market will definitely woo the investors to set their eyes back on Johannesburg's CBD. Sound alluring? Yes, there is much more in the budget offer made by the former South African finance minister.

Trevor Manuel, former finance minister of South Africa, received huge applauds from the investors in the property sector. The South African ex finance minister announced tax relief and tax incentives in his February budget speech. He mentioned in his budget speech that the tax incentives would be applied in the city centres across South Africa. The good thing is that since then, the owners of property investments who plan to revamp their building, would be eligible to claim a tax cut of 20 percent of the regular upgrade cost from their yearly income for five years. Owners who will construct new commercial or residential developments get a tax cut of 20 percent in the first year and five percent every year for the next 16 years to come.

Pauline Larson, the renowned property economist believes that this will bring in a huge change in the investment property field. She believes that the special incentive will attract the investors to invest in the inner city. She also suggests that it will be really interesting to see the much wealthier northern suburbs as the new stem of business migration from the lower end market in South Africa. She says further that it has been a long term of ten years that the inner city of South Africa has suffered a negative cycle, and that the new tax cut will bring investors back to these places once again. However, there is yet another point where the investors may vacillate about. It’s nothing but the growing records of crimes in the inner cities of South Africa. No doubt the incentives are really alluring, but it is yet another challenge for the government to fix the crime rates. Here too, Pauline has something good to say. The incentives surely compensate for some of the risks that are associated with doing business in the inner cities.

The national treasury has identified the areas as ‘developed urban transport infrastructure’, ‘high population carrying capacity’, CBDs and inner city environments. The other metropolitan areas that will receive the incentives are Tshwane, eThekwini, Ekurhuleni, Durban, Buffalo City, Mafikeng and Polokwane.

However, there are also some doubts about whether the new incentives will attract the new investors. Marc Scheinder, the property analyst for a research body expresses such a doubt. He believes in spite of the incentives we are still to see how the whole process works. Irrespective of whatever he suggests, the new tax cuts and incentives will surely attract more investors to the high yielding rental property of South Africa. This is more so because this is undoubtedly the best time to invest in these areas.

Author: IMAGINE Properties

Submitted 03 Nov 16 / Views 3448