Tax Savvy Tips with TGC: Understanding Your Home Owners Tax Obligations!
🏡 The Glass Castle today knows that owning a home is a big step, but it comes with its own set of tax responsibilities!
At various stages of home ownership—whether you’re a business property owner, a first-time buyer, long-time owner, or getting ready to sell—different taxes will come into play. First-time buyers especially need to be aware of their tax obligations and plan their property investments accordingly. Here’s what you need to know:
- Transfer Duties: When buying a property, remember that Transfer Duties are not covered by home loans. This financial burden rests with the buyer, so be sure to budget accordingly.
- Running Taxes: Municipal Tax is a running expense that impacts your monthly cash flow and budgeting. It’s essential to factor this into your financial planning.
🏡 Here’s a breakdown of some of the key taxes South African homeowners can expect to pay:
- VAT / Transfer Duty: Transfer Duty is a tax payable on the transfer of property. If you buy a property valued over R1 million, you’ll need to pay Transfer Duty unless the sale is subject to VAT.
Expect to Pay it: When buying a property. - Running Taxes (e.g., Municipal Tax): Municipal Tax is a recurring expense covering services like water, electricity, waste management, and property rates.
Expect to Pay it: While owning a property. - Capital Gains Tax (CGT): Capital Gains Tax is payable on the profit made when you sell your property. The tax is based on the difference between the purchase price and the selling price.
Expect to Pay it: When selling a property. - Provisional Taxes: Provisional Tax is applicable to properties that generate an income, such as rental properties. It’s a way of paying tax in advance to avoid a large lump sum at the end of the tax year.
Expect to Pay it: On income-generating properties.
Not sure about the taxes you’re responsible for as a homeowner? No worries—contact The Glass Castle today! Let us help you navigate the complexities of property taxes and keep your investments on track.
