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Watch Out When Refinancing Property Loans
| News by Staff ReporterThere may be a catch to Sars’s property tax amnesty that sees increased interest rates
While the South African Revenue Services (Sars) may have granted a tax amnesty for individuals wanting to transfer their primary properties into their own names (from a CC etc), MoneyWeb points out that this may end up increasing the interest rate on the home loan.Sars has granted a capital gains tax (CGT), transfer duty and secondary tax (STC) amnesty until 31 December 2012 for individuals whose primary residence is the sole asset of their company, trust or closed corporation (CC), and who wish to transfer the property into their own names.
“However, if the company, CC or trust has registered a bond over the property, the bond would need to be cancelled and possibly refinanced in the name of the natural person,” said MoneyWeb.
According to Magnus Heystuck from Brenthurst Wealth Management, banks do not always refinance these loans at the same rate as before. “Many if not most of these properties received bonds at prime minus 2% years ago and before the NCA (National Credit Act) came into being,” he said.
“Many people are reluctant to refinance as they will end up paying substantially more in interest and in some cases might not even qualify for a new loan in terms of the strict criteria used by the banks nowadays.”
Click here to read the full article on MoneyWeb.
Source: www.bizpremises.co.za
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