GENERAL NEWS
Already the estate agencies and conveyancing firms are finding that sales
transactions have come to a halt, so they could all be out of business.
However, it is not such a bleak picture with regard to commercial
properties as these are normally vatable transactions, so no transfer duty
is payable for purchases of new buildings from the developer, provided
that the developer and the purchaser are VAT registered.
The effects will also be felt in the agricultural and tourism sectors where
the foreign operators will be effected and as such, may choose to invest
elsewhere or, at best, lease. This may be what government and the citizens
are striving for, but it may turn out that there isn’t a great return, if any, to the
landlord as it will likely be a lessee’s market who will ‘call the shots’.
We don’t yet know what the act may look like in its final form, but if it is
as per the draft bills, it could have far reaching consequences for all in
many situations. For instance, where shares in a property company are
subject to the transfer duty will that mean that every trade of shares on
the BSE in the listed property companies, such as PrimeTime, will have
5% tax for citizens and 30% for non-citizens? In the Gazetted edition,
listed property companies are exempted.
What happens in the instance of a lease which is also subject to the
tax? Is a room that is leased month to month taxed and how is that
policed, the same as the cession of a leasehold property? This has since
been clarified in the Gazette that it only applies to what is deemed
to be a ‘sale’, so a lease that is 50 years or longer or has options to
extend to longer than 50 years will be affected.
Also, a citizen company is defined for this purpose as 100% citizen owned,
not a majority of 51%, which means that all BSE listed companies are non-
citizen! One of the principals of the BSE is that listed companies would have
citizen status. Since clarified – listed companies will be exempted.
What will happen is that the ‘market will make a plan’, one of which
will be that fronting will become the order of the day. Is that what we
and government want?
As I had said before, hopefully, post elections, good sense will prevail,
and things will return to normality. But, if the ‘Winds of Change’ are
blowing, who knows what will blow over and not arise for many years.
Sorry to sound so negative, but we must present the reality for ourselves
and our clients who we have serviced over the past 30 years and
more, as well as the considerable contribution that we have made to
the development of Botswana. We will not be ‘blown over’ as we have
very sound foundations which we will continue to build on. However,
as we have done with our diversification into Zambia and other
countries, we will spread our risk and if necessary, deploy our resources
and energy elsewhere.
Congratulations!
Lianrie and Steven are proud to announce the arrival
of Stefanie, their new little girl, who arrived on 17 July
and weighed in at 3.3kg.
With all the new arrivals at Time Projects it appears
as if there is something in the water! So beware - be
careful to ask for a cup of tea when you visit us.
A huge congrats to Kagiso Sebetso
for becoming the second Green Star
Accredited Professional in Botswana.
ISSUE 39 - SEPTEMBER 2019
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