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15 hours 13 minutes ago

Many last-minute investors kept the Section 12J sector burning the midnight oil as the 28 February tax deadline drew near, with some fund managers recording a significant increase in capital raised. Treasury’s recent announcement that the incentive will not receive an extension was clearly a catalyst for many taxpayers to make the most of the opportunity for the penultimate time.

Cape-based fund manager Anuva Investments saw keen interest in their property-backed loan option fund, developed in conjunction with Flyt Property Investment, having to extend the shares available in order to satisfy the demand. The fund, which allows investors to participate via a structured loan, is 100% subscribed and sold out of all units available at Wink Aparthotel in Cape Town’s Foreshore, all units at Eaton Square in Diep River, as well as the student accommodation units in Stellenbosch’s Quivertree.

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Wink Aparthotel, 100% sold via the Anuva and Flyt Property Investment’s Section 12J fund

 

The company’s recently-launched Blended Partnership Fund, which combined ownership in two of its hospitality property developments, reached its planned R50 million subscription cap within a matter of days following its launch, resulting in the release of a further 50 shares. The popularity of the fund can largely be attributed to the 100% loan facility that has been made available to investors and taxpayers who do not have the finance upfront.  Shares were issued at R1 million each, of which Flyt Property Investment contributed 65% on the investor’s behalf in partnership, leaving R350 000 (35%) required from the investor. A 5% deposit secures the investment; and a loan is made available for the balance to qualifying taxpayers while waiting for their SARS refund.

Commenting on SARS’s Section 12J announcement, Zane De Decker, CEO at Flyt, says that “Finance Minister Tito Mboweni’s announcement that Section 12J will not be extended does not come as a surprise; in fact we were expecting as much and in the past few months, we’ve been working extensively on developing our investment products to accommodate investors who will still have until 30 June 2021 to make the most of the tax incentive.”

Expectations were that Treasury might extend the deadline until February next year, which, according to many commentators, would make much more sense when it comes to financial and investment planning, as investors may not have a true indication of their investment capabilities for the 2022 tax year by this June. De Decker attributed the significant capital increase to their product offering and quality property projects. “We’ve experienced huge interest in our loan product, which we expect to be well received again before June, as the bridging finance aspect will give investors the breathing space they need before their next tax-filing season. Our current projects have been extremely well received and we’ve therefore lined up additional quality qualifying property projects, making us well positioned to take the next and final batch of 12J subscriptions,” he declared.

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Quivertree, Stellenbosch student accommodation, additional units were made available in order to cope with Section 12J demand,
the development is now 100% subscribed

 

Section 12J of the Income Tax Act was introduced in 2009 to encourage South African taxpayers to invest in local companies and receive a 100% tax deduction of the value of their investment. The investor receives a share certificate together with a tax certificate, allowing the invested amount to be deducted from the investor’s taxable income, in the year that the investment is made. To date, South Africans have invested an estimated R10 billion into the 12J sector.

The deadline for participation in the tax incentive is 30 June 2021, making the following quarter the last chance for investors.

The post Investors flock to Section 12J, as the bell tolls on the tax incentive appeared first on Everything Property.

18 hours 15 minutes ago

The National Household Travel Survey (NHTS), 2020 results shows that ‘walking all the way’ remained the mode of travel that was most used by learners to reach their educational institution in all nine provinces. The survey, released by Statistics South Africa in collaboration with the Department of Transport, reports that about 10,1 million learners walked all the way to their educational institution. The number of learners who walked all the way represents 59,4% of all learners. This is a decrease from the 11 million observed in 2013 which represented 63,4% of all learners.
All South Africans have a Constitutional right to have access to basic education and further education. The time from home to school or educational institution is an important factor to consider when determining the ease or difficulty one would experience when travelling to these institutions. Most learners in the country walked all the way to the educational institution (76,9%) because it is nearby or close enough to walk from home. The second reason provided was that public transport was too expensive (11,0%). This reason was most likely to be given in rural areas (13,1%).

Top 5 reasons for walking all the way final for data story

Walking all the way to the educational institution was prevalent amongst learners who attended school. Learners who attended a higher educational institution were most likely to use a taxi (31,5%), and driving a car/truck (24,1%) to reach their destination.

Across the provinces, the highest percentage of learners who walked to their educational institution were in KwaZulu-Natal (20,3%) and Gauteng (17,7%), followed by 14,6% in the Eastern Cape and Limpopo.

Learners who attended an educational institution and who used public transport were most likely to use a taxi (72,4%) as their mode of transport. Almost 27% used a bus (26,6%), while 1,0% used a train. Leaners who attended an educational institution and used a taxi were most likely to live in urban areas, compared to learners living in rural areas, who were most likely to use a bus.

Most workers used private transport (43,5%) as their main mode of travel to work, while 35,0% used public transport. 20,3% of workers reported walking all the way.

For work-related travel, the use of public transport was important across all geographic locations. However, urban workers were more likely to use a taxi than a bus as their main mode of transport, while rural workers were most likely to use a bus as their main mode of transport.
The estimated total number of workers’ trips using public transport decreased significantly from 5,4 million in 2013 to 4,7 million in 2020. Taxis accounted for most public transport users, with 80,2% of workers using taxis, which is more than the proportion reported in 2013 (67,6%). More than fifteen per cent (16,6%) of workers using public transport used buses in 2020, whereas in 2013, the percentage of workers who used buses was 19,5%. Those who used trains in 2013 (12,9%) significantly decreased to 3,2% in 2020.

Total number of trips to work final for data story

The general usage patterns of public transport as reported by households has changed significantly between 2013 and 2020. There has been an increase in households who used a taxi (from 9,8 million to 11,4 million). However, a decrease was recorded in the number of households who used a bus (from 2,9 million to 2,1 million) and a train (1,4 million to 0,5 million) as their preferred mode of transport.

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Facilities at the taxi rank and taxi fare remained the highest reason for dissatisfaction with minibus taxi services among South African households. In 2020, more than half of these households (56,9%) were dissatisfied with the facilities at the taxi rank. Regarding bus services, households were most dissatisfied with bus stop facilities, the level of crowding in the bus and security at the bus stop.

In 2013, reasons most likely to be indicated for dissatisfaction with train services were the level of crowding in the train (78,2%), followed by security on the walk to/from the train station (56,6%). In 2020, the level of crowding in the trains (86,8%) and waiting time for trains (86,6%) were the biggest problems mentioned by households.

The NHTS report covers a wide variety of travel data on household and individual travel patterns in South Africa. For more information, download the full report here.

 

19 hours 16 minutes ago

FNB’s Residential Property Barometer for February 2021 shows better-than expected house price growth further demonstrating the separation between economic fundamentals and housing marketing outcomes.

Interest rate-induced demand remains strong, but the momentum is slowing with incidents of downscaling due to financial pressure continuing to swell, although lower to the Global Financial Crisis.

However, rental market pressures persist with vacancy rates climbing and rental escalations slowing. Anecdotal evidence shows that some of this stock is being released into the market for sale.

Labour market weaknesses remain a major concern. The data shows that job losses are migrating to more white-collar workers.

The annual House Price Growth (HPI) accelerates in February

FNB’s annual house price appreciation rose in February to 4.2% year-on-year, up from 3.9% in January. However, on a month-on-month basis, price growth continues to slow which likely reflects the tapering of the interest rate induced demand. This data is consistent with the estate agents survey data which showed strong but slowing buyer demand, mainly in the middle-priced segments of the market.

Indicators have suggested slowing demand in the first quarter of 2021 with only 37% of estate agents expecting volumes to increase from 2020’s fourth quarter levels. FNB continues to see bigger, mainly freestanding properties gaining popularity with buyers responding to the demands of remote working.

The available data shows that lower-end prices remain relatively strong but are decelerating in line with the initial impact on labour markets. We expect this ‘correction’ to continue as employment takes time to recover” says Siphamandla Mkhwanazi, FNB Economist.  

However, the inherent stock shortages will likely keep property values afloat. Estate agents operating in affordable segments still see demand outstripping supply. Much of the reflation in 2H20 was driven by middle segments, buoyed by low interest rates as well as demand for bigger spaces to facilitate remote work. Part of this was also driven by tenants switching from renting to owning. It is unlikely that there is much of this demand left in the tank – Stats SA data shows that 66 000 professionals lost jobs in the fourth quarter of 2020, which does not augur well for mortgage demand”.

As pressure in the rental market intensifies, we expect more stock to be released into the market for sale. A combination of these factors is expected have a dampening effect on activity and, eventually, price growth in the coming months” he concludes.