Property carries a certain amount of risk (through bond finance) and should be in a Trust, which is an asset holding entity. The costs and taxes (transfer duty) can be efficiently structured if a unit is purchased directly from a development company.

Announcements in the budget speech of Mr Pravin Gordhan, Finance Minister, have opened up opportunities for trusts to buy “second-hand” properties at greatly reduced transfer duty rates.

Under the previous dispensation, trusts were liable for transfer duty at a flat rate of 8 % on the full value of the purchase price.

Property Investment Trusts now have the opportunity to pay transfer duty on a sliding scale similar to that of an individual.

This means that primary residences, investment properties and holiday homes owned by an individual, can be transferred to a property trust at reduced costs. 

Trusts offer the advantages of Income Tax Planning, Estate-Duty-, Executor Fee- and Capital Gains Tax Savings, Protection against creditors and diversifying the risks associated with different asset classes.

The example illustrates the huge transfer savings that can be obtained when transferring an asset to a properly structured and well administered trust.

*All property transfers will attract conveyancing costs and possible bond costs.
Kindly contact Trustfocus’ office at (021)9792501, to obtain more information on the financial benefits of structuring your portfolio in trusts.