A programme to address urban decay and rejuvenate the Johannesburg CBD was launched by the city's mayor, Amos Masondo

"... The state and appearance of a CBD is an important barometer to determine the ability of a city to attract and retain investment," Masondo said at the launch of the Inner-City Property Scheme (ICPS).

"It is also a reflection of the extent of the advancement of commerce and overall economic development," he said.

Masondo said the ICPS was a partnership with the private sector and would replace the Better Buildings Programme (BBP), which had tried to turn "bad" buildings into "better buildings"

He said the BBP had been only moderately successful because of the lengthy expropriation process, the screening of participants and the need to provide evicted people with transitional housing.

The ICPS, which was developed by the economic development department, would transfer expropriated properties to an inner-city property portfolio. There were 30 buildings which would be refurbished.

Broad-Based Black Economic Empowerment (BBBEE) participants would hold the controlling shares, with each having to invest R5 million.

A panel of BBBEE service providers would be created and would be responsible for the rejuvenation of the buildings.

"This makes the ICPS one of the most far-reaching BBBEE transactions yet introduced in South Africa, and definitely the biggest in the property field," said Masondo

He said the city would transfer properties that were dilapidated, abandoned, illegally occupied or hijacked, and vacant pieces of land through a developmental lease with an option to buy.

Once the buildings were transferred they would be refurbished and brought in line with the city's building code to turn them into viable and productive economic assets.

The city would ensure that the option to buy was exercised only once the dilapidated property had been refurbished.

Masondo said the city would provide transitional housing for people living in the buildings at the moment.

A Transitional Housing Trust had been formed to manage the process.

The trust would acquire buildings that would be revamped and turned into transitional housing facilities.

Economic development executive director Jason Ngobeni said this transitional housing would be provided until people could find new homes.

He said that as the old buildings were refurbished, rates would increase, which would make them unaffordable to many of these former residents, who were RDP housing candidates.

 

Comment on draft rates policy

PROPERTY owners in Joburg can comment on the City’s draft rates policy and amendments to the policy for the financial year 2011/12, which are now available for public scrutiny.

Comments can be submitted until 2 May. The City’s rates policy guides it in all aspects of levying rates on property owners. It has been reviewing the policy since 2008 to reflect policy changes proposed by the public and the council.

The director of the City’s rates department, Sihle More, said: “This is a very important process and we especially urge property owners to make their input so that the final approved rates policy is one that has been thoroughly consulted.”

The draft rates policy and the proposed amendments to the rates policy are available online.

Public consultation meetings on the draft rates policy will be held in all seven regions, from 11 to20 April.

“The whole idea of consultation processes is to engage the public and to give them a platform to give their view on the policy. Included in the draft policy are proposed rates on the purchasing of vacant land,” explained the City spokesperson, Virgil James.

James said: “The draft policy also helps property owners to make wise business decisions.”

The rates will also affect those who rent property, as their monthly rent money will also be determined by the outcomes of interest rates.

When making a submission, include your full name, physical address and company name.

All recommendations and proposals will be handed to the mayoral committee for consideration. Comments can be emailed to RatesComment@joburg.org.za This e-mail address is being protected from spambots. You need JavaScript enabled to view it , or dropped off at the City’s offices on Jorissen Street, in Braamfontein, or faxed to 011 727 0189.

Read more: http://www.joburg.org.za/index.php?option=com_content&view=article&id=6438&catid=88&Itemid=266#ixzz1IWu9lhR0

 

Demand for Student Accommodation

The demand for a place at the University of Johannesburg is at an all-time high; with queues of people trying to apply recently blocking the road and getting to and from campus was never more difficult.

As a result, more and more people are looking for student accommodation close to Johannesburg’s main university campuses. Thousands more students are registering at tertiary institutions in Johannesburg and they’re battling to find accommodation.

“Student population growth has far outstripped the supply of available rooms, making it difficult to find quality accommodation at affordable prices,” says Simon Rubin, marketing director of Aengus Property Management (APM), an inner-city developer renowned for turning defunct buildings into up market accommodation.

The problem is so critical in fact, that the Minister of Higher Education and Training, Dr Bonginkosi Nzimande, has established a committee to review the provision of student housing at public universities.

The minister said current student housing in residences provides for about 100 000 out of a student population of 530 000. This means just under 20% of students, nationally, will be able to find accommodation on campuses.

“Off-campus providers are cropping up but students are becoming more discerning,” says Rubin. “Although they demand value for money for accommodation, they are no longer prepared to accept low-quality accommodation with limited amenities, just because they are studying.”

“The ideal student accommodation should provide a private space for studying as well as opportunities for socialising and getting together with friends. Our developments also take into account that it’s important for students to live somewhere that is conveniently situated for day-to-day activities such as lectures, sport and socialising, as well as routine necessities such as shopping and doing laundry,” he says.

Rubin advises corporates to move quickly if they are looking for top-notch accommodation for bursary students attending the Johannesburg Universities and colleges.

“Demand always outstrips supply. With our main rental thrust taking place in January and February, I would advise anyone seeking affordable, up market alternatives to traditional student accommodation, to get onto waiting lists as soon as possible.”

 

Budget Speech summery

“Income Tax Relief for Individuals

Budget 2011 proposes tax relief for R 8.1 Billion, mainly for middle to lower income taxpayers through adjustments of personal income tax brackets. In addition to the primary and secondary rebates, a third rebate of R 2 000 per annum has been proposed for taxpayers 75 years and older.

Conversion of medical deduction to medical tax credit

Monthly deductions for contributions to medical schemes and for qualifying out-of-pocket medical expenses will be converted into tax credit effective 1 march 2012. This is to ensure that the tax relief remains consistent across different tax rates. The manner in which these credits will operate will be released in a discussion document.

Businesses and Trusts

Dividends tax

The new dividends tax set to replace the existing secondary tax on companies will come into effect on 1 April 2012. The introduction of dividends tax should correct the impression that a tax on dividends is another tax on businesses: legally and economically, it will be a tax on dividends and non-resident shareholders.

Two issues remain unresolved regarding the new dividends tax – the proposed taxation of inbound foreign dividends and the taxation of foreign-owned South African branches. Foreign-owned South African branches are currently subject to tax at a 33 percent rate instead of the standard 28 percent rate. It is proposed that the 33 percent rate be repealed when the new dividends tax comes into effect.

Closure of Dividend Schemes    

Revenue is of the opinion that certain dividend schemes undermine the tax base as a consequence of dividend sessions, receipt of dividends from shares in which the taxpayer has no meaningful economic risk and the use of preference shares that generate allegedly tax-free dividends while the dividends are indirectly generated from interest-yielding debt. Revenue will effectively close these schemes by treating the dividends at issue as ordinary revenue.

Revised tax rules for capital distributions and for pre-2001 capital gains assets 

Currently dividend distributions are subject to secondary tax on companies and capital distributions are subject to capital gains tax. The international practice is to reduce the distributing share base cost by the capital distributions, with gains only taking effect once the base cost is exceeded. This has, however, not been practical in South Africa as the pre-2001 capital gains tax rules prevent taxpayers from knowing the base cost of pre-2001 assets until disposal. A simplified system for determining the base cost of pre-2001 assets is being considered and this should align the South African capital gains tax rules with international practice.

Youth employment subsidy

In order to support job creation, a tax credit system over the next three years will be introduced when youth are employed.

New environmental tax and levy on electricity

From 2012, Revenue will introduce a new carbon tax. The detail of how the tax work is still to be finalised. In addition, the government levy on electricity generation from non-renewable energy sources will increase to 2.5c/Wh from 1 April 2011.

Cross-border withholding tax on interest

The new proposed withholding tax on cross-border interest payable at 10% will become effective from January 2013.

Currency transaction indirectly connected to certain foreign hedges

Currently, only certain exemptions and deferrals are available on foreign currency transaction used for business. It is proposed to further expand on the exemptions to allow for the exemption of foreign gains/losses on all linked instruments, i.e. where foreign bank loans are utilised to fund foreign inter-group loans.

Tax payments by individuals with more than one source of income

Pensioners receiving income from more than one retirement fund/insurer may be contacted by SARS in order to request that the pension/annuity be subjected to a higher rate of tax. This is to ensure that pensioners whose income is split across different sources (and consequently taxed individually at lower rates) do not have a tax liability on assessment.

Employer-provided long-term insurance plans

Revenue concedes that the changes to employer-provided insurance plan such as key-man, income protection policies and unapproved group life remains ambiguous. It is the intention of Revenue to rationalise the concerns that the industry has raised.

Lump sums from provident funds

Retirement lump sum amounts from provident funds will be subject to the same one-third limit applicable to pension funds and retirement annuities. This implies that two-thirds of the retirement value must be used to purchase compulsory annuities. The fact that no deductions were historically allowed for employee contributions to provident funds does not seem to have been considered. As two-thirds of the retirement benefit must now be taken as an annuity which is subjected fully to tax at marginal rates, provident fund members will effectively be denied the tax relief for non-deductible contributions that would have been obtained when taking the full benefit out as a lump sum.

As with the change to the deductibility of retirement fund contributions, the impact of this change on provident fund members also requires evaluation and further engagement with Revenue.

Miscellaneous changes

Gambling:

All gambling winnings above R25 000 will be subject to a final 15% withholding tax. This includes winnings from the National Lottery.

Securities Transfer Tax:

Brokers (members of a stock exchange) are exempt from securities transfer tax. It is proposed that the exemption be revised to clarify that it applies solely to players engaged as market makers.

Tax policy research projects:

Revenue has commenced with tax policy research projects which include investigations into the taxation of financial derivatives, long-term insurers and the effectiveness of estate duty.”

PARKTONIAN HOTEL SUIT - R 650,000.00

Description:

Sale of 1/300th of the public rooms, restaurant, bar, conferencing areas, & back-up areas such as kitchen, storerooms & staff areas.

This ownership comes as a result of all these areas being classified as "common areas" in terms of the Sectional Title Act, such that the revenues generated in these areas, & costs associated with these areas, & costs in generating such revenues, will be apportioned equally between the 300 suite owners.
Self -sufficiency can be very rewarding. The Protea Parktonian Hotel boasts the most spacious hotel guest rooms in Johannesburg. There are 300 of these suites, all similar in size, most with personal bar, mini-safe, radio, colour TV & air conditioning. New Electronic key card locks have recently been installed.
Concurrently with the sale of suites on Sectional Title, all suites will be refurbished & refitted to top 2 star standards.

Blue Label in not very excited by this offer. Hotels with occupancy of 75% are considered to be doing ok. The occupancy rate of residential units in the Braamfontein area is around 90%. Let the numbers speak for themselves.

We also want to ask the question: if the hotel business is so great why are they selling?

When considering this investment be sure that you know the following:

1.   Levies for the upkeep of the common areas (any changes in levies if a restaurant moves out and there is no more income for this space.

2.   What is the seasonal occupancy, are you going to sit through winter with no income?

3.   What happens in a recession? People stop staying in hotels – people don’t stop staying in their apartments.

4.   READ THE CONTRACT – the written contract that you sign is it! Anything that the salesperson promises that is not contained in the document will be impossible to claim later on.

Take your time, think about it and ask questions.

 

Good news for Investors that took the risk in the CBD

BRAAMFONTEIN — When top South African designer David Tlale’s models took to the catwalk during Johannesburg Fashion Week, they were strutting where no fashion show has gone before: a bridge in the city’s notorious downtown.

Tlale’s fall/winter couture show was held Saturday on the Nelson Mandela Bridge, an iconic landmark in Johannesburg’s inner city and an area long plagued by a reputation for crime and urban decay.

The show, titled “Made in the City,” was inspired by the people who work downtown, Tlale said, and included 92 models — one for every year of Mandela’s life.

David Tlale is known in particular for his dramatic dresses with creative use of texture and shape. Sophisticated and daring designs have made him popular among South Africa's celebrity crowd. He said with this show he wants the world to see that fashion from Africa is more than just traditional African prints.

“We wanted to showcase the beauty of the city,” he said. “Perceptions need to change about what comes out of Johannesburg.”

The move is an important boost to the slow but steady revitalization of an area that slid downward into crime and neglect starting in the end days of apartheid, when white people and companies fled to the suburbs. As the inner city emptied out, it became notorious for rapes, murders, carjackings and the phenomenon of “hijacked” buildings, where criminals take control and illegally collect rent from squatter tenants.

More than two decades later, there is no quick fix to the continuing problems of downtown, but change is visible in pockets of Johannesburg’s city core that are becoming trendy arts and commercial areas. The successful Arts on Main project, for example, has seen warehouses turned into studios, galleries and creative industry offices, while nearby Main Street Life has apartments, a boutique hotel and an art-house cinema.

The area around Gandhi Square, the main bus hub, has shed its crime-filled reputation and now caters to white-collar office workers with shops, restaurants, outdoor cafes and pedestrian streets.

Last year’s soccer World Cup also provided positive attention to the inner city area of Newtown, which hosted a fan park.

“The inner city is becoming vibrant,” she said. “It’s about time that people rediscover Joburg. So many people have not taken the time to go back to the inner city.”

Tlale recently moved his fashion studio from the suburb of Parkhurst to Braamfontein, a booming area in the downtown that is attracting designers, artists and art galleries. A major Johannesburg gallery, the Brodie/Stevenson, also recently relocated from the suburbs to Braamfontein.

“It was the right time for us to move, because of the revival of the city,” Tlale said. “It’s really exciting here right now.”

 

7 Secrets to a Happy Tenant

Now I am not suggesting that you let the tenants live there for free or pay rent as late as they want, but I think there are 7 simple things you can do that will keep them happy. And happy tenants will treat your property better, pay their rent on time, stay in your building longer, and recommend you to their friends as a good (possibly great) landlord.

 

1.    Be friendly, respectful, and courteous always. Then when you need to be firm, they will know you are serious.

2.    Answer your phone when the tenant calls or return their call promptly. Nothing is more frustrating when you have a question or problem and someone will not return or take your calls.

3.    Stop by or call to just chat and see how they are doing. This lets them know you care about them as a person. Ask about their work, their kids, or what they enjoy.

4.    Repair everything in the unit that the tenant calls about. Even a simple dripping faucet can fester into a frustration in time.

5.    If the tenants have lived in the apartment for more than 2 years, touch up the paint in the main areas, paint a room a colour that you both agree on, or shampoo the carpet. You are not only keeping them happy, you are maintaining your property.

6.    If the tenant always pays on time and they call and tell you the rent is going to be late, forgive the late fee this one time. Even the banks do it!

7.    Offer an incentive if they find a new tenant for you. I give my existing tenants R500 if they find a new tenant that signs a lease. It costs the same as a newspaper ad and much cheaper than a vacant unit.