Real Estate Investor Magazine South Africa September 2015 | Page 34

RESIDENTIAL, STRATEGIES

Expansion of Residential

Property Portfolios

Investment opportunities through
the Alienation of Lands Act
BY GERT VAN STADEN

T

he average property investor is confronted with
mounting challenges in the establishment and
expansion of residential property portfolios.
The investor’s struggle to procure finance has been
exacerbated by the introduction of additional
restrictions by virtue of the National Credit Act 34
of 2005 (“Credit Act”), combined with the banks’
collective recurring memory of economic collapse.
Notwithstanding
the
unfavourable
credit
environment, a number of innovative mechanisms to
establish and expand the investor’s portfolio are present.
One interesting opportunity lies in the application of
the provisions of Chapter II of the Alienation of Land
Act 68 (“the Act”), preceded by a thorough analysis
and planning of the investor’s estate and structures.
32

SEPTEMBER 2015 SA Real Estate Investor

Wikipedia.org defines innovation as “a new idea,
more effective device or process. Innovation can be
viewed as the application of better solutions that meet
new requirements, unarticulated needs, or existing
market needs. The term innovation can be defined
as something original and more effective and, as a
consequence, new, that “breaks into” the market or
society”.
Estate Planning should be aimed at the establishment,
maintenance and sustained development of the
investor’s estate and structures to reduce tax while
increasing the property’s liquidity and disposable
income.
Chapter II of the Act provides for the sale of land
where the purchaser pays the purchase price to the
www.reimag.co.za