Buy To Let .co.za

Capital gains tax was introduced in South Africa on 1 October 2001. This is a tax paid on the profits made on the sale of any asset, including residential property. If you purchase a property for your own personal occupation as your primary residence, you are exempt from capital gains tax unless you make a gain or loss in excess of 111 million when you sell the property. Each year individuals are entitled to make a gain of up to R10 000 tax-free. if you make a gain of greater than R10 000 and you are an individual, you have to include 25% of the net gain when calculating the tax payable. For companies, close corporations and trusts 50% of the net gain is included when calculating the tax payable. Remember, you will only pay tax on the profit you make, not the total proceeds from the sale. This means you can deduct the cost of buying and maintaining the property from the amount you realise at the sale. It is therefore essential that you keep all important documentation and receipts of expenses relating to the purchase and improvements

Residential rentals are exempt from VAT, regardless of whether or not the landlord is a VAT vendor. The rental income will be liable for Income tax, but any loan interest may be set off against rental income for tax purposes. The interest portion of your loan will be disclosed in your Nedbank Buy To Let loan statement. Expenses related to the property may also be tax-deductible. Once again the financial, estate planning and taxation requirements of each investor differ and professional advice In this regard is recommended.