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A Fin24 user writes:
I would like to buy an investment property with cash. Should I buy this in a trust or in my personal name?
I am concerned specifically about tax issues. I may earn around R4 000 per month in rental income.
Mari van Wyk, Korbitec executive manager: industry relationships responds:
Questions on property ownership are often quite complex and to understand a situation more clearly, it is always advisable to discuss issues in detail with a financial adviser who can give help in analysing the various aspects, including the tax implications.
However, John Webber from DLA Cliffe Dekker Hofmeyr offers some useful guidelines and considerations to take into account.
He explains that if a buyer's intention is to hold a property for the long term, there could be a reason to own the property in a trust.
However, when it comes to owning a property for the short or medium term (up to 15 years), property ownership in the buyer’s own name is advisable.
John also explains that a trust will not not offer any tax advantages over owning the property in your own name, and that the administration and costs required in order to run a trust effectively can negate the benefits that owning a property through a trust can offer.
- Fin24
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- Fin24
I would like to buy an investment property with cash. Should I buy this in a trust or in my personal name?
I am concerned specifically about tax issues. I may earn around R4 000 per month in rental income.
Mari van Wyk, Korbitec executive manager: industry relationships responds:
Questions on property ownership are often quite complex and to understand a situation more clearly, it is always advisable to discuss issues in detail with a financial adviser who can give help in analysing the various aspects, including the tax implications.
However, John Webber from DLA Cliffe Dekker Hofmeyr offers some useful guidelines and considerations to take into account.
He explains that if a buyer's intention is to hold a property for the long term, there could be a reason to own the property in a trust.
However, when it comes to owning a property for the short or medium term (up to 15 years), property ownership in the buyer’s own name is advisable.
John also explains that a trust will not not offer any tax advantages over owning the property in your own name, and that the administration and costs required in order to run a trust effectively can negate the benefits that owning a property through a trust can offer.
- Fin24
Add your voice to our Property Issue:
* Write a guest post
* Share a personal story
* Ask the experts
- Fin24
