Seeff Residential Properties has urged property owners to have their properties and other assets valued for capital gains tax as soon as possible.
Property owners are required by law to do so before September 30, 2003 — within two years of the tax enactment on October 1, 2001.
”If the tax does apply to your property and you neglect to have it valued, you may well find yourself paying tax on supposed capital gain that may have more to do with the high inflation rates of the 1970s and 1980s, rather than merely on any gain accrued between October 1, 2001 and the subsequent sale of the property,” Seeff Western Cape Licensees Ian Slot warned.
Slot said tax applied to the properties, whether in South Africa or abroad, owned by South African citizens and permanent residents. It also applied to properties in South Africa owned by non-citizens and non-residents.
Capital gains tax does not apply to properties if a profit of less than R1-million is made on the sale of a property that is a primary residence.
The capital gain is the difference between an asset’s ”base” or ”initial” cost on the one hand and its sales price after October 1, 2001 on the other.
Slot said the valuation must state the market value of the property as at October 1, 2001. Capital gains tax is payable at the end of the tax year in which the gain occurred. – Sapa