Minister of Finance extends deadline



Property owners will no doubt welcome the Minister of Finance's decision to allow them a further year in which to have their properties valued for capital gains tax, says the president of the Institute of Estate Agents, Mr Bill Rawson. The original deadline was September 30, 2003. It has now been extended to 30 September, 2004. A valuation must, however, indicate the value of the property as it was on October 1, 2001, the date on which CGT was introduced. "To judge from the frequent enquiries which we receive", says Rawson, " there are a lot of people out there who are still confused about whether or not they should have their properties formally valued. Some seem to think that it's compulsory - which it isn't - and that they have to shell out large sums of money for it." Rawson points out that, as far as residential properties are concerned, many owners will not have to pay CGT when they sell because they will qualify for the "primary residence exclusion". This means that if the property (a) is registered in the seller's own name, i.e. not in the name of a company or CC, and (b) is the seller's actual home, and if (c) the plot is smaller than 2 hectares, and (d) the capital gain is less than one million rands, then the owner will not have to pay CGT. "However," says Rawson, "they will still need a property value figure to show on their tax return for the year in which they sell. But the CGT system provides for a pro-rating method which can be used as an alternative to a formal valuation, so it is not by any means compulsory to have a formal valuation done. "Nor it is obligatory to call in a registered professional valuer for a valuation. The SA Revenue Service indicated at the outset, two years ago, that it did not require valuations to be carried out by professional valuers. Valuations by estate agents and other people - even the taxpayers themselves - are acceptable, as long as they can be justified by means of supporting documents and information which the SARS may ask for."