A swift State of Disaster declaration on 17 March paved the way for less bureaucracy to allow measures to ensure South Africa avoids the fate of mainland China, central Europe and the United States - said to be the new epi-centre of this global pandemic.
We've carved a near week into the 21-day lockdown the country is under, with daily updates from the President's core Covid-19 task force ministers - (including the departments of Health, Police, Trade, Transport and Social Development to mention a few) - screening and testing measures have been ramped up - along with policies and acts adjusted to ensure the Coronavirus brunt is limited.
South Africa's economy is being pummelled but a number of debt relief measures and funds are positively in the pipeline.
Right now the big question on any business or South African individual's mind is, "What is available and how can I apply for it?"
SEE: 10 lockdown FAQs answered
Here's a list of the most important measures available for South Africans to apply for:
Businesses and individuals are advised to apply for the assistance provided only if absolutely necessary and no other private insurance safety measures are in place. Added to this, tax compliance and correct business registration requirements must be in place before applications can be submitted. Know of a measure that needs to be included? Email editor@property24.com.
Debt Relief Measures
Covid-19 Temporary Relief Scheme
This allows employers to apply for the COVID-19 Temporary Relief Benefit - to stem the financial distress of due to the pandemic for up to 3 months.
The benefit is de- linked from the Unemployment Insurance Fund's normal benefits and will only pay for the cost of salary for the Employees during the temporary closure of the business operations.
Benefits will pay a replacement income equal to minimum wage of the sector concerned and be capped to a maximum amount of R17 712, 00 per month, per Employee. It is subject to the income replacement rate sliding scale (38 % -60 %) as provided for in the Unemployment Insurance Fund Act 63 of 2001.
Businesses can apply for the Covid-19 TERS Benefit from the UIF by sending an email to covid19ters@labour.gov.za where you will be prompted with further instructions.
Small Business Development Minister Khumbudzo Ntshavheni on Tuesday, confirmed the relief measures were underway, saying reference numbers for fund allocations are expected to begin on 1 April - but also acknowledging the risk of multiple applications clogging the system.
SEE: Navigating an economy hit by downgrades and a deadly virus - what the experts have to say
Business Growth and Resilience Facility for essential services
Industrial Development Corporation (IDC) together with the Department of Trade, Industry and Competition has set aside R3 billion to aid medical and hygiene product suppliers with capital to ensure they are able to meet the high demand during this Covid-19 pandemic. Essential services businesses will need to obtain approval from the department for approval to trade here: www.bizportal.gov.za
SMME Relief Finance Scheme
Soft-loan funding for existing businesses in distress due to the COVID-19 pandemic. The relief will be for a period of 6 months, from 01 April 2020. Click here for the application process via www.smmesa.gov.za
Spaza shop support scheme created
Launched by the Minister of small business development, Khumbudzo Ntshavheni on Tuesday - it will provide seed capital to shops owners to allowed them to continue to provide essential good. They must have a permit to trade from a local municipality as one of the core requirements. SALGA is making allowances to supply this during the lockdown period so shop owners can qualify for the aid.
South African Future Trust (SAFT)
Created by the Oppenheimers, it allows SMMEs to apply for an interest free loan - aiding them to keep their employees during this time of cash flow crunch. Terms can be reached to repay the loan, once the crisis is over.
Eligibility includes annual turnover of below R25m, trading for at least 2 years, sound business as on 29 February and demonstrated adverse impact due to Covid-19. Click here for more details for application process details.
Tourism relief fund due to Covid-19 travel restrictions
The Department of Tourism has made an additional R200 million available to assist the industry as it is impacted by the new travel restrictions. The fund will be administered to benefit SMMEs in all the 9 provinces and various tourism sub-sectors. The department says, "Necessarily and rightly there will be a degree of bias towards rural areas, townships, women, young people and people with disabilities."
Measures are being put in place to administer the fund, with Tourism Services Call Centre being set up. Click here for the latest details.
READ: Property24 waivers fees for agents as SA braces for impact of Covid-19 lockdown
Airbnb to pay 25% of cancellation fees due to Covid-19
Home-sharing platform Airbnb has set aside $250m (about R451bn at R18.04/$) to help cover the cost of COVID-19 cancellations.
When a guest cancels an accommodation reservation due to a COVID-19 related circumstance, with a check-in between March 14 and May 31, Airbnb will pay hosts 25% of what they would normally receive through your cancellation policy.
"This applies retroactively to all COVID-19 related cancellations during this period. This cost will be covered entirely by Airbnb. These payments will begin to be issued in April. Guests with reservations booked on or before March 14 will still be able to cancel and receive a standard refund or travel credit equivalent for 100% of what they paid. Visit airbnb.com/250Msupport for more details.
Payment Holidays
What the major banks are offering
- Standard Bank
From 1 April 2020, Standard Bank will support small and medium-sized enterprises (SMEs) with a payment holiday for 90 days (01 April 2020 until 30 June 2020) - restructuring payments for the repayment to come into effect after the 90-period. Visit the Standard Bank Covid-19 site.
Small businesses, students and those needing help with home loans can email debtcarecentre@standardbank.co.za or call 0860 123 000.
- Absa
From the 1 April 2020, ABSA's corporate and business clients will be offered solutions based on their unique requirements and operations. For retail clients, the ABSA relief programme incorporates a three-month payment holiday and allows customers to reduce their monthly repayments. See more details on the Absa Covid-19 site.
Absa bond home-owners who would like to apply for relief should mail bondrs@absa.co.za.
- FNB
From 1 April to 30 June 2020 aimed at providing relief to individual and business FNB customers whose financial stability has been impacted by Covid-19 pandemic. Visit the FNB COVID-19 site.
- Nedbank
No specific relief policy for businesses or customer are currently in place. Customers are encouraged to contact the bank directly if they are in financial distress due to Covid-19. Call 086 055 5111.
Customers who need payment relief should call the dedicated debt relief centre on 0860 110 702 and home-owners who need help can also email HLCollections@Nedbank.co.za or MoratoriumRequest@Nedbank.co.za
Sefa-Debt Restructuring Facility offers six-month pay holiday
Small businesses funded by the Small Enterprise Finance Agency (Sefa) will be given a payment holiday for the next six months, with certain conditions applicable. Click here for the application process via www.smmesa.gov.za
Tax breaks and competition rules relaxed
Employment Tax Incentive (ETI) raised to cover all ages - and paid monthly
Government will extend its existing Employment Tax Incentive (ETI) programme, aimed at young workers, to all ages. Companies will be able to claim R1 500 per month for every worker who earns less than R6 500 and is younger than 30 years for the first year of employment and R1 000 in the second year of employment from the SA Revenue Service. Also, companies will get R500 for all workers up to the age of 65 who earn less than R6 500 a month. For young workers who have already been covered by the ETI payments for two years, employers will get R500 for each of them.
SARS will also pay back the PAYE reimbursements every month, instead of twice a year.
Companies allowed to keep 20% of monthly PAYE
Small- to medium-sized businesses - with an annual turnover of less than ZAR50 million - will be able to defer payment of 20% of their employees' tax (PAYE) liabilities due and payable for the period 1 April 2020 to 31 July 2020, without penalties and interest. The relief will be available to tax-compliant businesses.
The 20% deferral will be payable in equal instalments over six months from 1 August 2020, i.e. the first instalment must be paid by 7 September 2020.
Joon Chong, Partner at Webber Wentzel says, "In summary - there is no relief measures for VAT late payments unfortunately. There is VAT and customs duty concessions for importation of essential goods, if the importer obtains an import permit from ITAC.
"There is only relief for PAYE and provisional tax payments for small and medium sized businesses, i.e. with annual turnover of less than R50 million. Small- and medium-sized employers can defer 20% of PAYE for 1 April 2020 to 31 July 2020, over six months with no penalties and interest.
"First repayment is by 7 September 2020."
Deferral of provisional tax payments
"Small- and medium-sized companies can defer provisional tax payments, 15% of estimated tax liability for the first provisional tax payment, 50% for the second, the remainder by the third provisional top up date. All of this is being finalised," states Chong.
"One possibility is that they could be eligible for similar relief if their annual turnover is less than ZAR5 million and less than 10% of their income is from interest, dividends, foreign dividends, rental and remuneration."
Customs duty and VAT concessions on importation of "essential goods"
SARS issued a media statement on 27 March 2020 (updated on 29 March 2020) on certain customs duty and VAT concessions on the importation of "essential goods" as defined in the regulations issued under the Disaster Management Act.
Importers will be able to claim a full rebate of customs duty and VAT exemption on the importation of certain goods. A list of the qualifying goods is available on the International Trade Administration Commission ITAC website. However, in order to claim customs duty relief under item 412.11, the importer will need to obtain an import certificate (permit) from ITAC.
VAT late payment penalties in question
There has been no relief outlined for late VAT payments by vendors. There will thus be 10% late payment penalties and interest imposed on any VAT payments made after their due dates, regardless of the vendors' VAT turnover. The 10% late payment penalties and 20% underestimation penalties are percentage-based penalties in the Tax Agreement act. The percentage-based penalties may be remitted in exceptional circumstances, if the taxpayer was "incapable of complying with the relevant obligation" in a tax statute.
Given that BGR 52 has referred to the Covid-19 pandemic as circumstances beyond the control of taxpayers, it is likely that the pandemic would similarly constitute exceptional circumstances for any requests for remission of percentage-based penalties and interest in the TAA.
Nevertheless, any requests for remission of penalties and interest will be on a case-by-case basis. A SARS committee considering the request is likely to be guided by the principles of whether objectively (1) the taxpayer was incapable of complying with its tax payment obligations; and (2) the documents provided to support this allegation are accurate and reliable.
Competition rules for retail sector relaxed
The Covid-19 block exemption for the retail property sector has since been issued by the Minister of Trade, Industry and Competition Ebrahim Patel opening up a "safe harbour" for firms in the sector to co-ordinate particular activities to ensure the survival of tenants of retail properties during the Covid-19 national disaster, says Webber Wentzel legal experts.
Retail tenants and retail property landlords are free to reach agreements between and among one another in relation to payment holidays and/or rental discounts for tenants.
The agreements and practices may only be implemented for the sole purpose of responding to the Covid-19 national disaster. Furthermore, the exemption does not apply to any communication or agreements relating to pricing (unless specifically authorised by the Department).
SEE: Covid-19 relief for retail landlords and tenants as competition laws eased
Every little bit counts
From Virgin Active announcing they would automatically freeze memberships, to South Africans being encouraged to pay their domestic workers, even if not permanently employed - every effort helps to stem the financial backlash.
South Africa has also joined the Solidarity Fund - which is looking for monetary and non-monetary donations, encouraging citizens to come together as a nation, to look after one another.
Individuals cannot apply for assistance from the fund, the South African government will distribute donations through various channels to achieve the fund's goals of: prevention, detection, care, and support as the country deals with the Covid-19 pandemic. Click here to donate.
"As with any crisis, timing is always critical and many of these programmes are understandably still being operationalized," says Kumaran Padayachee, Spartan SME Finance CEO.
Spartan will continue to collate its relief resource registry that any SME can tap into to assess if they can apply for relief, how to go about applying.
As a debt funder, Padayachee says Spartan knows the pain many SMEs are experiencing right now, which is why the registry also digs into analysis of each relief measure listed.
As with the actual funds, the Covid-19 Relief Registry is a work in progress.
"Relief initiatives typically go through the phases of announcement, followed by development, and then they put the operations in motion - this includes processing applications - which is at the heart of what small business owners want to know right now," says Padayachee.
Click here to see more details on the Spartan Relief Registry.
FRIDAY, 20 MARCH 2020 11:27
Written by eProperty News
With the South African Reserve Bank's announcement of interest rates cut of 100 basis points and earlier transfer duty exemption for properties below R1 million by the Minister of Finance, local regulations have made it attractive for first-time home buyers to enter the market.
Amidst the uncertainty, the outbreak of the novel Coronavirus has an unexpected upswing for South Africa's property and real estate market. According to experts, South Africa is also likely to see a buyer's market opening up during this period, with supply exceeding demand.
As a result, individuals looking to buy may be able to purchase property at prices lower than the average. During the viral outbreak, the US has seen a positive impact on the real estate market with Forbes reporting a 224% increase in reapplications for home financing and first-time home buyers taking advantage of the lower mortgages.
It remains critical for consumers to educate themselves about buying property, especially in these uncertain economic times. Below are some of the questions they should think of.
What is the importance of owning or buying property?
Owning your own home, particularly for the first time, is an incredible feeling - a mixture of excitement, accomplishment and pride. Property ownership gives the sense of security, stability and peace of mind.
Property generally appreciates over time increasing the value of your personal wealth.
Should you wish to make any alterations like adding a room (like at the birth of your child), you can easily do so as the owner.
Having own property gives you stability that guarantees your kids acceptance to attend local schools.
Is this the right time to be buying property? Why do you say so?
The increase in the transfer duty threshold provides a very positive incentive, not only for first-time home buyers, but all those people purchasing homes as ultimately, they pay less transfer fees compared to last year.
What does the announcement above mean to home buyers or property investors?
Consumers across the board, even for consumers wanting to purchase properties valued at more than R1 million, will realise some saving. For example, a consumer who purchases a house valued at R2.5 million would have a saving of R17 000 in transfer fees. The estate duty change significantly reduces the financial burden on those looking to enter the market. In addition, favourable lending conditions and an oversupply of new developments make this a good time to buy property.
What tips can you give someone who is buying property for the first time?
What does this announcement mean to prospective buyers who are employed by government?
Government employees qualify for housing allowance of R1200 per month. So, employees wanting to own property and utilise these benefits can contact the housing access support services via the Government Employees Housing Scheme (GEHS) on www.Gehs.gov.za to understand their individual situations.
What are the advantages or disadvantages of owning a property?
Below are the advantages and disadvantages that homeowners need to weigh in before making the commitment:
Advantages
There is pride in home ownership - you customise your home according to your own taste.
Buying a house is a sound financial investment, values generally appreciate.
No duty paid for properties below the threshold of R1 million.
Monthly re-payments are stable as compared to renting.
Disadvantages
There are substantial upfront costs such as deposit, transfer duty, transferring attorney costs, moving costs, etc., which can cause stress if one is not financially prepared for this.
If you are not financially stable, buying a house can lead to financial ruin as this monthly financial commitment can be up to 20 years and your house can be repossessed if you fail to honour the premiums.
It is not just the bond repayments, ongoing costs include electricity, water, municipal rates & taxes, levies (if in a gated community), maintenance gardening, paining, etc.
Selling your house can range between 3 months to a year depending on the market.
There are many costs associated with your dream home. Doing your financial homework upfront and analysis is key to having the peace of mind that you can cope with all the costs and enjoy your new home and the making of many happy memories.
South Africa is currently seeing the emergence of a new type of property buyer known as a "rentvestor", says Gerhard Kotzé, MD of the RealNet estate agency group.
There`s no such thing as an inexpensive property investment mistake, says Lance Chalwin-Milton, joint MD of specialist property auction house The High Street Auction Co, but some markets are more equal than others, and in the South African commercial real estate sector, Cape Town is where ill-informed decisions are likely to exact the largest toll.
The needs of business and leisure travellers are constantly evolving. Is the serviced apartment accommodating them?
Serviced apartments are a relatively recent phenomenon. They are fully furnished flats that have similar amenities to hotel rooms and can be used for either short-term or longer-term stays
News broke last week that The Fitch ratings agency could affirm SA's rand-denominated credit rating one level above junk at BBB-, a move that no doubt makes us question what this means for the property development and real estate sectors.
A deposit is a predetermined sum of money which a tenant is required to pay the landlord before taking occupation of any commercial premises.
The area of zero-rated VAT for a commercial property transaction can be confusing and must be properly understood if one wishes to avoid confusion and delays.
Every growing business throughout its life cycle is confronted with the important decision to continue leasing or own the premises in which it operates.
"Is it better to invest in equities or property? " This very common question comes up frequently, but the answer is that they are not directly comparable as they are completely different asset classes.
As I am writing this, the universities in my country are burning and our finance minister has been summoned to court on charges of fraud causing the currency, once again, to devaluate like a rock falling.
What does it mean to be wise as serpents and as harmless as doves when you are a business person under such circumstances?
Owning a home is a dream-come-true for many young people, but being a first-time buyer wrapped up in finding just the right property could mean that the thought of what it will cost to run and maintain that property hasn't crossed your mind.
South African vacancy rates in non-CBD nodes are gradually moving back to their equilibrium position.
Based on data published by Statistics South Africa, building activity in the South African market for new private sector-financed housing (see explanatory notes) remained under pressure in the first five months of 2016, with much subdued year-on-year growth in activity levels in May this year.
Should you rent or buy a residential property?
It all depends on where you are in life, according to Paul Stevens, CEO of Just Property, who says that making the correct choice is entirely dependent on one`s stage of life, financial situation and personal circumstances.
When a sectional title unit is being sold, the situation sometimes arises where it is discovered too late that the scheme's body corporate has not been run properly, that they have not held AGM's regularly or the financials are showing signs of discrepancy or debt, said Michael Bauer, general manager of property management company IHFM.
Over the past few years, economic uncertainty and stock market volatility has boosted investor interest in residential rental property.
And it can be a great source of income as well as long-term capital gain, but what many investors forget is that those returns are not tax-free.
So, you've been thinking about getting a foot on the property ladder, but your salary doesn't quite cover the kind of bond you'd been hoping for.
When purchasing commercial property, be it a factory workshop or an office, the value of the property can be assessed from 2 fundamentally different standpoints, Len Pears of Quagga Property Brokers says.
The valuation of a substantial track of developable vacant land with the potential for township establishment poses special challenges to property valuers.
Many landlords and tenants feel that they have considered all the aspects of a future tenancy of premises. It is only years down the line that many side effects of a lease agreement may come into effect, many of which may be negative.
South African investors and developers looking at investing in Africa need to partner with locals and be involved for the longer term as returns might not be attractive initially, according to Fergus Mackintosh, head of real estate for Africa at Standard Bank.
One of the key structural drivers of economic performance is economic openness which measures the connectedness and mobility of economies that comes about through international trade, capital flows and the movement of information and people.
Broll report reveals positive outlook for SA commercial property despite downward pressure on South African GDP Malcolm Horne, CEO of Broll Property Group, part of the global CBRE Affiliate Network, says: "The Broll Property Report 2013 shows the outlook for an upturn in world growth is now brighter than in 2012.
SOUTH African businesses and financial institutions need to seriously explore an alternative funding mechanism that could turn rental housing into some form of equity buildup for middle-income earners who do not qualify for bonds or government housing subsidies, says Tongaat Hulett CEO Peter Staude.
There have been some interesting developments in recent months in the US housing market with many regions seeing strong sales and price increases leaving analysts talking about a sustained recovery.
The circulation boosting headline of "25% drop in house prices" was misleading to say the least. The article referred to the fact that existing houses can be currently bought at a 25% discount when compared to the current cost of building.
It is generally accepted practice, depending on investor needs, that any well-constructed investment should include an appropriate split between shares, property and cash.
The user investor market is beginning to raise its voice in the US; will SA follow suit?
The profit margins of developers and contractors have been squeezed in order to bring new developments to the market during the economic downturn, says Colin Green, a director of Rabie Property Group.
Analysts warn that companies having to pay hefty tax bill on property sales could retard the development of land.
South Africa`s new Companies Act includes making directors liable for losses and measures to give distressed companies more time to recover.
The economic experience of the Portugal, Italy, Greece and Spain bloc through the recent global financial crisis compared with that of SA has been well documented and discussed and the differences are clear.
Doug Wares, CIOB Africa president, considers the building of relationships and trust among team members, and between the team and the customer, essential to great delivery of a construction project.
Sanlam's head office in Bellville is managed by JHI property services group, which is making recommendations on 'green' initiatives in various commercial properties.
Governments all over the world have turned to infrastructure projects over the past few years as an immediate means of creating employment and boosting economies out of recession.
Zoned land with development rights is becoming increasingly scarce and the rezoning process increasingly more complex and time consuming which will make it difficult for developers to respond quickly to an upturn in the market.
Building professionals in the South African construction sector need little reminding that the development pipeline has shrunk in recent months.
The performance of listed property remains closely correlated to bond yields and not necessarily underlying fundamentals.
The Consumer Protection Act will only apply to a property transaction when the seller (or in the case of a lease, the landlord) is acting in the ordinary course of business.
While consensus has the South African commercial property market facing a gradual and varied recovery in 2011, specific areas of the sector are showing promise beyond the norm.
The SA listed property posted an impressive 29.6% total return for the year 2010, notably outstripping both the All Share and the All Bond indices.
There are strong signs that Sub Sahara-African economies are benefiting from rapidly developing telecommunications, mineral extraction and the energy sector.
The payment behaviour of residential tenants in the third quarter of 2010 is relatively unchanged compared to the second quarter remain, which is possibly a sign that embattled consumers have settled down to the discipline of keeping household expenses under control
The November 2010 Property Watch alluded to the fact that Banks consider owner/occupiers to be high risk borrowers.
Banks appear to be looking for financial utopia, i.e. non-risk lending and that's pie in the sky stuff, any form of lending carries risk of some sort.
Intent on being the first Green Star SA Rated Office building in KwaZulu Natal, the 6700sqm Lincoln on the Lake mixed-use development in Durban`s upscale Parkside precinct of Umhlanga Ridge New Town Centre is poised to raise the bar on environmental standards for commercial projects throughout SA.
November 5, 2008 was a beautiful evening to celebrate an auspicious occasion, the unveiling of the extensive renovations to The Devon Valley Hotel outside Stellenbosch, including twenty new luxurious rooms.
Cradle City, the first city planned around an airport in South Africa, is likely to be an innovative, sustainable, green-driven development on 912 hectares surrounding Lanseria International Airport, north of Johannesburg. "In addition to a unique location, with Lanseria International Airport as the focus for the development with the attractions of the nearby Cradle of Humankind, we are in an extraordinary position to build a city from the start. This provides an exciting opportunity to optimise the mix of uses, facilities and amenities, " said Markus Kaps, Key Projects appointed director of development for Amari Land.
Cradle city will be the first planned city built around an airport in South Africa. The Green driven city will be situated on 912ha of land around Lanseria International Airport. Key projects are the appointed development and project managers for the developer Amari Land on this very exciting project.
Key Projects is baie betrokke om op die grootste private eiendoms ontwikkeling nog in Suid-Afrika gesien.
"Idwala is a Zulu word for rock - apt, for a site that is covered in a uniquely beautiful orange-tinged rock, a material used extensively in all the structures, one that contributes substantially to gentle invisibility." The Elphick Proome designed 5 star lodge had many logistic challenges for builders and deliveries, these obstacles were successfully project managed by Key Projects.
Key projects were proudly involved on this prestigious office park development at Century City in Cape Town. The project, a joint venture between Louis Group International and Nucleus provides 4250sqm of AAA grade office space.
Key Projects are playing a vital role in Growth Point`s ambitious goal of attaining South Africa`s first 5 Star rated green building. Key Projects are a corporate member of the Green Building Council of South Africa.
Cape Town's popularity as a world-class tourist destination has resulted in a spike in the number of homes available for holiday lets and fuelled investor demand for sectional title units with short term rental potential.
