Anyone looking for owning property in South Africa has many options they can consider. This however will depend on the type of property they want such as buying a house and property to live in, to rent out, as an investment, to have as a standby home or simply because of their desire to have extra assets. Whatever it is, you must have at least some sort of knowledge on these different options of owning property in SA.
Listed below are some of the options open to a property owner:
- Property Company
- Listed Property
- Share Block Company
Freehold – Applicable to an individual or corporation, Freehold ownership enables the owner to have complete hold over the property and is the commonest form of property ownership that takes place. With this option, the owner has complete control over the property and can do whatever they want, such as use it for living purposes, sell it if they want to or even use it as collateral to obtain a loan.
Sectional – This type of property has many owners who each has a piece of property in his name in the same piece of land with certain features such as parking space, swimming pool and other communal structures or utilities that can be used by everyone who owns a piece of property in that land. This mostly applies to housing schemes or town houses where several houses are built by separate owners in the same land.
Property Company – Property Company ownership takes place mostly in stock exchange listed companies when companies that are interested in purchasing property exclusively for business purposes, will start a property company without making the shareholders of their companies liable.
Syndication – This happens when the cost of the property is too much for one person to bear. In this case, several interested people will get together and invest in a single property causing a syndication ownership.
Listed Property – Listed property is can be placed on a list on the Johannesburg Stock Exchange which can be traded. When a person desires to invest in a certain property without having control over it, they can then invest in this type of listed property.
Share Block Company – A share block is where each shareholder is allowed ownership of all properties and all tax liabilities associated with the properties. This means the property company is not responsible for taxes or any assets in the property.
As stated at the beginning, the option of your choice will depend on your reason for ownership. While all the above types of property can be rented the sectional property attracts more investors due to its larger market. Depending on the reason for buying your property, you will have to take all aspects into consideration before deciding on the type of ownership you require.