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Buying property: Tax Consideration
A thread
http://thetaxplatform.tax/2020/10/20/buying-property-tax-consideration/
A thread
http://thetaxplatform.tax/2020/10/20/buying-property-tax-consideration/
- Check if the Valuer is registered
When declaring value of property for Transfer Duty purposes acceptable valuation by BURS are from those registered according to the Real Estate Professionals Act. Ensure such vauler is registered and confirm with the relevant association as some may forge membership certificates.
This will protect you from any re assessments or backlashes from BURS.
2. Transfer Duty exemptions
2. Transfer Duty exemptions
Together with your agent or any other professional assess all the available exemptions to check which one best suits your situation. There are exemptions such as for first time homeowners, transactions that were subject to VAT, P1m threshold, transfer between spouses etc.
A property subject to VAT valued at P1.5m will be best suited for the VAT exemption provision than the P1m threshold provision. It's important not to jump on the new and common exemptions without having gone through a thorough assessment of what's available.
3. Maximize the exemptions where possible
Much of the exemptions available in the Transfer Duty Act are of no use if the property purchased was subject to VAT.
Therefore where possible maximize the Transfer Duty exemptions through purchase of property from Sale in Execution transactions as they fall outside the VAT scope.
4. Record keeping
4. Record keeping
We buy property for different reasons, sometimes to hold on as investment or our homes. But there come a time when you may decide to sell such property.
Proper record keeping of information relating to the purchase is important as the costs of acquisition will be used in determining the capital gains arising from the sale.
Therefore information like invoices from property agents, lawyers, consultants and purchase agreements are important and should be kept safely. Costs in relation to improvements of the property should also be kept safely.
This thread can be read here: http://thetaxplatform.tax/2020/10/20/buying-property-tax-consideration/
