ENTITIES WHICH YOU CAN BUY A PROPERTY IN SOUTH AFRICA AND FACTORS TO CONSIDER.

In South Africa you can buy a property in one of the following ways:

1. Natural Person (individual)

   
   

   FACTORS TO CONSIDER - There is a risk from personal creditors

   - Taxed at your marginal tax rate - could increase your tax rate

   - Costs when you pass away: There is 20% estate duty or 25% on an estate worth over R30 Million.

   - Capital Gains Tax (CGT) based on your marginal rate.

   - 4,025% executors' fees

2. Company

   FACTORS TO CONSIDER - Protection from insolvency: If a company director goes insolvent, the property is not affected.

   - No transfer duty: If the company is VAT registered, there is no transfer duty when selling the property.

   - No estate duty.

   - You may pay more Capital Gains Tax when selling the

   property.

3. Trust

   
   

   FACTORS TO CONSIDER - No estate costs.

   - You have full control over assets.

   - No auditing required.

   - Children's inheritance protected.

   - Tax rate of 40%

   Our advice

   
   

   In South Africa, buying a property is a huge investment and buying it through your name (natural person) or company / trust (juristic persons) carries profuse legal and financial implications. It is advisable to consult a lawyer to help you understand the disadvantages and advantages of owning a property through different types of entities, tax implications, alignment with your investment strategy and assets protection.

   
   

   Email our office for a discounted virtual consultation on: info@legaldrafters.co.za

   we look forward to hearing from you!