Real Estate Investor Magazine South Africa May 2016 | Page 9

PROPERTY ADVICE CAPITAL GAINS Q W What makes more financial sense when buying a house to renovate and sell at market value? Can I claim the capital gains tax back? hen buying to renovate and sell, the ‘profit’ on the transaction is subject to normal taxes and not Capital Gains Tax. All expenses incurred in acquiring, renovating and selling the property are typically tax deductible. The difference between these expenses, and the revenue generated on selling, would be added to other income earned in your Personal Capacity (eg: remuneration), and taxed accordingly. One must also be aware of possible VAT consequences if the revenue exceeds R1mil. MICHAEL DRYDEN Trust expert and Accountant DEPOSITS Q U SIMON DIPPENAAR Proerty Lawyer What happens to my deposit if I have signed a lease but have now received a transfer and cannot move in? nfortunately, the answer differs from case to case, and each situation should be assessed on its merits. If the lessee cancels the lease, and the landlord cannot secure a new tenant in time, and this leads to a loss of income, then the landlord would be entitled to retain one month’s deposit as a reasonable cancellation fee, since the property would have been reserved for that lessee. Should the landlord be able to secure a new tenant in time, and not suffer any loss of income, then, (in my opinion), the landlord would not be entitled to retain the deposit, or any part of it, since no damages would have been suffered. There would also be no entitlement to a cancellation fee either. GREEN DEVELOPMENTS Q T ETTIENE PRETORIUS Property Developer What are the consequences of building a residence with conventional materials and methods, and why should I consider a green alternative? here are very little consequences when building with conventional materials. The majority of the impact on the carbon footprint lies in the use of luxury items that fulfills the basic household needs and wants, such as warm water, stoves, lighting, pumps, and temperature regulators. Converting your house to an off-the-grid-system makes no economic sense. To accommodate the masses the 80/20 principle should be followed by implementing lower energy consumption initiatives such as gas stoves, LED lighting, solar geysers with a backup 1000 element and timers for pumps. To expedite the conversion process from conventional household initiatives to more green and environmental friendly initiatives, the local building and municipal councils should change their minimum green building regulations and the government should help subsidize portions of the cost. DO YOU HAVE A PROPERTY QUESTION YOU WOULD LIKE ANSWERED BY OUR EXPERTS? If so, post it on ASK THE EXPERTS on www.reimag.co.za or email [email protected] www.reimag.co.za Ask The Property Experts click here MAY 2016 SA Real Estate Investor 7