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Lake Properties, Cape Town is a young and dynamic real estate agency located in Wynberg, Cape Town. We offer efficient and reliable service in the buying and selling of residential and commercial properties and vacant land in the Southern Suburbs including Bergvliet,Athlone,Claremont,Constantia,Diepriver,Heathfield,Kenilworth,Kenwyn,Kreupelbosch, Meadowridge,Mowbray,Newlands,Obervatory,Pinelands,Plumstead,Rondebosch, Rosebank, Tokia,Rondebosch East, Penlyn Estate, Lansdowne, Wynberg, Grassy Park, Steenberg, Retreat and surrounding areas . We also manage rental properties and secure suitably qualified tenants for property owners. Another growing extension to our portfolio of services is to find qualified buyers for business owners who want to sell businesses especially cafes, supermarkets and service stations. At Lake Properties we value our relationships with clients and aim to provide excellent service with integrity and professionalism, always acting in the best interest of both buyer and seller. Our rates are competitive without compromising quality and service. For our clients we do valuations at no charge
Showing posts with label homeforsale. Show all posts
Showing posts with label homeforsale. Show all posts

What is the best builder upgrade you can make when buying a new house in South Africa

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Let’s go deep into why certain upgrades are the most valuable when buying a new build in South Africa, and why picking the right ones upfront saves you money and boosts your property’s resale value.


1. Solar Power & Backup Energy Systems

Why it’s the #1 upgrade:
Load-shedding is not going away anytime soon. Installing solar panels, an inverter, and battery storage during construction allows the wiring, inverter space, and roof setup to be built for it from day one. This avoids expensive retrofits later.

Benefits:

  • Constant power during load-shedding.
  • Lower monthly electricity bills.
  • Massive resale appeal — buyers are increasingly prioritising homes with power backup.
  • Adds “green” and energy-efficient marketing appeal.

Tip: If the budget is tight, start with an inverter + battery and have the wiring prepped for solar panels later.


2. Energy Efficiency Upgrades

Electricity costs in SA are rising well above inflation, so making the house energy-efficient now saves thousands over time.

Smart upgrades:

  • Double-glazed or Low-E glass windows — reduce heat loss in winter and heat gain in summer.
  • Extra insulation in the roof and walls — cooler in summer, warmer in winter, reduces reliance on heaters/AC.
  • Solar or gas geyser — a big household energy consumer, so reducing this cost pays back quickly.
  • LED lighting — minimal consumption and longer life.

Resale benefit:
Homes with lower running costs are becoming more desirable, especially for budget-conscious buyers.


3. Structural & Layout Changes

These are extremely costly to change later, so prioritise them over decorative features.

Examples:

  • Higher ceilings (2.7m vs. standard 2.4m) — makes rooms feel larger, improves ventilation, and adds a luxury feel.
  • Larger garage or storeroom — South African buyers value secure parking and extra storage for tools, sports gear, and backup water tanks.
  • More plug points and lighting — especially in kitchens, home offices, and outdoor entertainment areas.

Resale benefit:
Better layouts and functional spaces increase buyer interest far more than fancy finishes.


4. Kitchen & Bathroom Quality

These are the most used and most noticed rooms — if they look modern and well-built, the whole house feels more valuable.

Best upgrades:

  • Stone countertops (granite or quartz) — durable and premium looking.
  • Soft-close drawers and cupboards — improves longevity and feel.
  • Frameless glass showers — more modern and easier to clean.
  • Dual vanities in the main bathroom — convenience sells.

Resale benefit:
Buyers often make decisions based on these rooms alone. Stylish, functional kitchens and bathrooms reduce the need for them to budget for renovations.


5. Flooring in Main Living Areas

Flooring sets the tone for the home’s style. Replacing it later means moving furniture, removing skirtings, and redoing finishes — expensive and disruptive.

Best options:

  • Porcelain tiles — durable and easy to clean.
  • Vinyl planks — water-resistant and warm underfoot.
  • Engineered wood — premium feel without the maintenance of solid wood.

Resale benefit:
High-quality flooring improves first impressions instantly.


Why this order matters in South Africa

  • Lifestyle needs (power backup) come first.
  • Running cost savings (energy efficiency) come second.
  • Future-proofing (structural changes) comes third.
  • Style and finishes (kitchen, bathroom, flooring) only after the essentials are covered.

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Would buying a house that is in trust have some advantages or does it not make any difference all, in South Africa

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Buying a House in a Trust in South Africa – Advantages & Disadvantages

Purchasing a property that is held in a trust in South Africa can be beneficial in some cases, but it also has its challenges. Whether it’s a good idea depends on your financial goals, estate planning needs, and tax considerations. Below is a detailed analysis of how trusts work in real estate transactions in South Africa.


1. What is a Trust and How Does it Work in Property Ownership?

A trust is a legal entity that holds assets on behalf of beneficiaries. It is managed by trustees according to the terms set out in a trust deed. There are different types of trusts used in property transactions:

  • Inter Vivos (Living) Trust: Created during the founder’s lifetime and commonly used for asset protection and estate planning.
  • Testamentary Trust: Established through a will after the founder’s death, often to provide for minor children or dependents.
  • Business Trusts: Sometimes used for property investment purposes, but they have specific legal and tax considerations.

When buying a property held in a trust, you are not dealing with an individual seller but rather the trust, which may require trustee approval and compliance with trust laws.


2. Advantages of Buying a Property in a Trust in South Africa

A. Asset Protection from Creditors

  • If you own property personally and face financial difficulties, creditors can attach your assets, including your home.
  • A house in a trust does not belong to any individual but to the trust itself, meaning it is generally protected from personal debt claims and liquidation.

B. Estate Planning & Avoidance of Probate

  • When an individual passes away, their estate must go through the Master of the High Court’s process (probate), which can take months or even years.
  • A house in a trust bypasses this process, ensuring that beneficiaries receive the asset more smoothly without the risk of delays.
  • Trust-owned properties do not form part of the deceased estate, which means no estate duty tax (currently 20%–25%) is payable on the value of the property.

C. Potential Tax Benefits

  • While trusts are taxed at a flat 45% rate on income and 36% effective rate on capital gains, there is a way to reduce tax liability.
  • Trustees can distribute income and capital gains to beneficiaries, who are taxed at their individual rates, potentially lowering the overall tax burden.
  • If structured properly, the trust may help in reducing the tax impact on rental income and capital gains.

D. Continuity & Succession Planning

  • Unlike individually owned properties, a trust allows seamless succession planning since ownership does not change upon death.
  • This is beneficial for families looking to preserve generational wealth without the hassle of transferring property ownership after each death.

E. Multiple Ownership & Joint Investment

  • A trust makes it easier for multiple individuals (such as family members or business partners) to collectively own a property without having to structure complicated ownership agreements.
  • The property remains under trust control, ensuring disputes among individuals do not disrupt ownership.

3. Disadvantages of Buying a Property in a Trust in South Africa

A. Higher Taxation

  • Trusts pay higher tax rates than individuals:
    • Income tax: 45% (compared to a sliding scale of up to 45% for individuals)
    • Capital Gains Tax (CGT): 36% (compared to 18% for individuals)
  • This makes trusts less tax-efficient unless trustees distribute income to beneficiaries in lower tax brackets.

B. Loss of Direct Control

  • Once a house is in a trust, it is managed by trustees who must follow the trust deed.
  • The person who set up the trust (the founder) cannot make unilateral decisions about selling, renting, or transferring the property.
  • Trustees must approve all transactions, which can slow down decision-making.

C. Complicated Financing & Mortgage Issues

  • Banks and financial institutions are hesitant to grant home loans to trusts.
  • When lending to a trust, banks usually require:
    • Personal surety from trustees (meaning they must personally guarantee the loan).
    • Larger deposits (usually around 20%–30%).
    • Stricter lending criteria, as banks see trust-owned properties as higher risk.

D. High Setup and Administration Costs

  • Setting up a trust involves legal and administrative fees, including:
    • Attorney fees for drafting a trust deed.
    • Annual compliance costs (accounting and tax submissions).
    • Trustees’ fees (if independent trustees are used).
  • These costs can make owning a property through a trust more expensive than direct ownership.

E. Potential for Abuse & Complexity in Management

  • Some people misuse trusts to evade taxes, leading to increased scrutiny from SARS (South African Revenue Service).
  • Poorly managed trusts can lead to family disputes, especially if beneficiaries feel they are not getting fair treatment.
  • Trustees have a fiduciary duty to act in the best interest of the beneficiaries, meaning they cannot always follow the wishes of the person who set up the trust.

4. When is Buying a House in a Trust a Good Idea?

Purchasing a property in a trust can be a smart move if: ✔️ You want to protect assets from creditors.
✔️ You plan to pass the property on to future generations without going through probate.
✔️ You want to own property collectively with family members or business partners.
✔️ You have a high-value estate and want to minimize estate duty tax.
✔️ You can distribute trust income efficiently to beneficiaries in lower tax brackets.


5. When is Buying a House in a Trust NOT the Best Option?

It may not be ideal if: ❌ You want full control over the property.
❌ You need a home loan, as banks have stricter lending rules.
❌ You are not concerned about estate duty (for estates below R3.5 million, estate duty savings are minimal).
❌ You want lower tax rates, as individual ownership offers better tax treatment.


Conclusion: Should You Buy a Property in a Trust in South Africa?

Whether or not you should buy a house in a trust depends on your financial goals, family situation, and long-term plans.

  • If asset protection, estate planning, and multi-generational wealth are priorities, a trust makes sense.
  • If tax efficiency and personal control are more important, individual ownership may be better.

To make the best decision, consult a real estate attorney, tax advisor, or trust specialist who can guide you based on your personal circumstances.

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What must you do if you know that you are going to miss a bond instalment

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