By Landlord SOuth Africa
Published: November 8, 2010
With matric learners now in the throes of final exams, many parents are once again facing the problem of finding suitable away-from-home accommodation for children who plan to go to college or university next year.
But the problem is turning out to be an opportunity for property sellers in residential areas close to tertiary education institutions, says Richard Gray, chief executive of Harcourts Africa, who explains that increasing number of parents are realising that it is possible to provide suitable and stable accommodation for students and benefit from a shrewd investment decision at the same time.
“Indeed, we see a quite a new trend emerging of families buying a second property close to a college or university rather than a holiday home, say, or a rental property elsewhere. And the reason is that they have worked out that such purchases will provide students with off-campus ‘digs’ that are a cost-effective alternative to residences or rented rooms and flats, and will usually prove their worth as pretty canny investments as well.”
Parents whose children have finished their studies, he says, can usually find a ready market for these second properties among the parents of incoming students, and make a good profit on their initial outlay.
“Increasingly, though, we see parents retaining these properties and using them as the means to give their newly-graduated children a head start in their careers – as assets that can be rented out to generate an additional income, or that they can live in themselves while they get established, or that may serve as security for a loan needed to start a new business or professional practice.
“In this way, their investment becomes the ‘gift that keeps on giving’ and proves its worth over and over – while also helping more young people to achieve home ownership and contributing to the rejuvenation of many areas around colleges and universities by a new generation of residents.”
Areas where this trend is already clearly evident, says Gray, include Observatory and Rondebosch in Cape Town, Auckland Park and Richmond in Johannesburg, Glenwood and Umbilo in Durban, and Arcadia and Hatfield in Pretoria.
Tuesday, November 9, 2010
Tuesday, September 21, 2010
Save our institutions
Dispatch Online
2010/09/20
Save our institutions
A REPORT over the weekend that South Africa’s students owed R13.2billion in tuition and accommodation fees is a clear indication of the depth of the debt crisis facing our universities.
Thousands of students at 14 of the country’s 23 tertiary institutions are liable for more than R2bn in outstanding fees this year alone, the Sunday Times reported.
Institutions are battling to get the money back, including from students financed through the National Student Financial Aid Scheme (NSFAS), which is expected to pay at least R788.2 million of the outstanding fees of this year.
The NSFAS is owed R3.3bn over the last 11 years by graduates who got study loans, while another R7.1bn is owed by more than 530000 students who are still studying or who have dropped out.
In our region of the Eastern Cape, the picture is equally bleak. Walter Sisulu University has the dubious distinction of being owed almost R389m in outstanding fees – including R121m last year.
According to a financial report presented at an executive management meeting last month, WSU will have a projected deficit of almost R66m by the end of this year.
Judging by the response from WSU’s vice-chancellor Marcus Balintulo – who described WSU’s student debt crisis as “critical” – a solution may still be a long way away.
“We have to juggle around and sometimes we delay paying (for services). It’s a tough situation,” he told the Sunday Times.
What is clear is that a blame game for the current cash crunch at WSU and elsewhere will get nowhere closer to solving the problem.
Riots like the one at WSU’s Nelson Mandela Drive campus in Mthatha last week, which saw 241 students arrested, are not only unacceptable, but also do nothing to solve the situation.
The solution, it seems, lies in untangling a number of complex issues interwoven in a vicious circle involving students, institutions, government and the private sector.
Students need to understand that study loans – including from the NSFAS – are contracts that must be fulfilled.
This means returning to the lecture halls and bringing home proper pass rates as their side of the bargain.
Institutions like WSU need to beef up their culture of learning and their image as places of excellence where young people, mostly from disadvantaged communities, have hope for a brighter future.
Government – and the private sector, for that matter – needs to create jobs and find the space to reward those who make it to help ease their financial burden in paying back student loans.
But, as Balintulo said: “It’s a tough situation.”
2010/09/20
Save our institutions
A REPORT over the weekend that South Africa’s students owed R13.2billion in tuition and accommodation fees is a clear indication of the depth of the debt crisis facing our universities.
Thousands of students at 14 of the country’s 23 tertiary institutions are liable for more than R2bn in outstanding fees this year alone, the Sunday Times reported.
Institutions are battling to get the money back, including from students financed through the National Student Financial Aid Scheme (NSFAS), which is expected to pay at least R788.2 million of the outstanding fees of this year.
The NSFAS is owed R3.3bn over the last 11 years by graduates who got study loans, while another R7.1bn is owed by more than 530000 students who are still studying or who have dropped out.
In our region of the Eastern Cape, the picture is equally bleak. Walter Sisulu University has the dubious distinction of being owed almost R389m in outstanding fees – including R121m last year.
According to a financial report presented at an executive management meeting last month, WSU will have a projected deficit of almost R66m by the end of this year.
Judging by the response from WSU’s vice-chancellor Marcus Balintulo – who described WSU’s student debt crisis as “critical” – a solution may still be a long way away.
“We have to juggle around and sometimes we delay paying (for services). It’s a tough situation,” he told the Sunday Times.
What is clear is that a blame game for the current cash crunch at WSU and elsewhere will get nowhere closer to solving the problem.
Riots like the one at WSU’s Nelson Mandela Drive campus in Mthatha last week, which saw 241 students arrested, are not only unacceptable, but also do nothing to solve the situation.
The solution, it seems, lies in untangling a number of complex issues interwoven in a vicious circle involving students, institutions, government and the private sector.
Students need to understand that study loans – including from the NSFAS – are contracts that must be fulfilled.
This means returning to the lecture halls and bringing home proper pass rates as their side of the bargain.
Institutions like WSU need to beef up their culture of learning and their image as places of excellence where young people, mostly from disadvantaged communities, have hope for a brighter future.
Government – and the private sector, for that matter – needs to create jobs and find the space to reward those who make it to help ease their financial burden in paying back student loans.
But, as Balintulo said: “It’s a tough situation.”
Friday, September 17, 2010
Our Youtube production has gone live!
We are proud to announce that our Youtube production is now live. You can get a glimpse of what our properties look like, our office and our friendly staff. Visit http://www.youtube.com/watch?v=VhWp7LOW288 to watch the video.
Thursday, July 15, 2010
UJ Students to march over accommodation
The Citizen
Wednesday, 14 July 2010 17:37
NONI MOKATI
JOHANNESBURG - Students at the University of Johannesburg (UJ) are crying foul over “dodgy” accommodation.
According to ANC Brixton branch spokesman Joseph Se-hlabaka, many students had approached the ruling party about alleged money-laundering and the exploitation of students.
It is claimed that the university provided shoddy accommodation to students sponsored by the National Student Financial Aid Scheme of South Africa (NSFAS).
But UJ executive director of students affairs Professor Bobby Mandew said the allegations were baseless and untrue.
A student, who spoke on condition of anonymity, alleged there was overcrowding in some of university approved apartments.
Some students have apparently not been allocated accommodation, despite NSFAS having paid UJ for their residences.
One student charged that some of privately-owned student accommodation establishments were not accredited and were in a dire condition. Some of the “worst” residences are said to be in Ekeinhof, South of Johannesburg, and one in the Johannesburg central business district.
A number of students based in Brixton are vehemently opposing their mooted relocation (by the university) to Ekeinhof.
Students have threatened to embark on a big march if the university failed to meet their demands.
“Our parents are under the impression that we live in well-established houses and yet we are forced to live in dilapidated buildings.
“What’s more frustrating is that some of the flats in town are surrounded by prostitutes at night,” said one student.
An ANC Youth League member was apparently due to face a disciplinary hearing for speaking out on the matter.
Prof Mandew confirmed that one student was facing a disciplinary hearing after he led a group of first-year students to protest outside his house.
nonim@citizen.co.za
Wednesday, 14 July 2010 17:37
NONI MOKATI
JOHANNESBURG - Students at the University of Johannesburg (UJ) are crying foul over “dodgy” accommodation.
According to ANC Brixton branch spokesman Joseph Se-hlabaka, many students had approached the ruling party about alleged money-laundering and the exploitation of students.
It is claimed that the university provided shoddy accommodation to students sponsored by the National Student Financial Aid Scheme of South Africa (NSFAS).
But UJ executive director of students affairs Professor Bobby Mandew said the allegations were baseless and untrue.
A student, who spoke on condition of anonymity, alleged there was overcrowding in some of university approved apartments.
Some students have apparently not been allocated accommodation, despite NSFAS having paid UJ for their residences.
One student charged that some of privately-owned student accommodation establishments were not accredited and were in a dire condition. Some of the “worst” residences are said to be in Ekeinhof, South of Johannesburg, and one in the Johannesburg central business district.
A number of students based in Brixton are vehemently opposing their mooted relocation (by the university) to Ekeinhof.
Students have threatened to embark on a big march if the university failed to meet their demands.
“Our parents are under the impression that we live in well-established houses and yet we are forced to live in dilapidated buildings.
“What’s more frustrating is that some of the flats in town are surrounded by prostitutes at night,” said one student.
An ANC Youth League member was apparently due to face a disciplinary hearing for speaking out on the matter.
Prof Mandew confirmed that one student was facing a disciplinary hearing after he led a group of first-year students to protest outside his house.
nonim@citizen.co.za
Wednesday, June 9, 2010
JHB Student Accommodation Boom
12 May 2010
Property markets in Johannesburg areas such as Richmond, Auckland Park, Westdene, Braamfontein and even further afield in Yeoville and Rosettenville are straining to meet the demand for students' accommodation.
Servicing tertiary institutions, such as Wits and the University of Johannesburg (formally RAU and Wits Tecknikon), these areas are enjoying the spinoffs of expanding student populations says Brian Lovell of leading local agency Homenet Leaders.
"Factors such as a shortage of land for additional development and the influx of home offices and service industries to support demographics are also underpinning the market in these areas," he says.
"These are older suburbs but basically they are being re-invented in the process of becoming 'student city.' As a result, there is strong demand for apartments as well as houses that will accommodate students on a communal basis."
A case in point is the Calais complex in Montgomery Park, around the corner from the University of Johannesburg, which is comprised of about 200 one and two-bedroom apartments. "Five or six years ago, a one-bedroom unit in this complex would have sold for about R130 000 and a two-bedroom version for R180 000. Today they are fetching around R380 000 and R480 000 respectively."
In fact, prices for student type-accommodation in this part of the city have generally doubled in the past three years, despite a spate of purpose-built new development, and expectations are that they will continue to escalate, although perhaps more slowly now that the University of Johannesburg is rumoured to have plans of its own for building rentable student accommodation in Melville.
Says Lovell: "The rationale for investing in flats or larger homes to house students is inescapable. Parents will have to pay for student accommodation whether they own it or not. It simply makes good business sense to direct those resources into something that will, in all likelihood, provide a financial return at the end of the students study period.
"And the returns have been excellent, although they may be leveling off to some extent, perhaps for no other reason than that the banks will not continue ad infinitum to provide financing where they cannot see endless increases in values.
"Having said that however, once the property market in general resumes its strong growth, as is generally anticipated, so too will student-orientated properties and for the investor with a medium to long term view, that means an excellent opportunity."
Property markets in Johannesburg areas such as Richmond, Auckland Park, Westdene, Braamfontein and even further afield in Yeoville and Rosettenville are straining to meet the demand for students' accommodation.
Servicing tertiary institutions, such as Wits and the University of Johannesburg (formally RAU and Wits Tecknikon), these areas are enjoying the spinoffs of expanding student populations says Brian Lovell of leading local agency Homenet Leaders.
"Factors such as a shortage of land for additional development and the influx of home offices and service industries to support demographics are also underpinning the market in these areas," he says.
"These are older suburbs but basically they are being re-invented in the process of becoming 'student city.' As a result, there is strong demand for apartments as well as houses that will accommodate students on a communal basis."
A case in point is the Calais complex in Montgomery Park, around the corner from the University of Johannesburg, which is comprised of about 200 one and two-bedroom apartments. "Five or six years ago, a one-bedroom unit in this complex would have sold for about R130 000 and a two-bedroom version for R180 000. Today they are fetching around R380 000 and R480 000 respectively."
In fact, prices for student type-accommodation in this part of the city have generally doubled in the past three years, despite a spate of purpose-built new development, and expectations are that they will continue to escalate, although perhaps more slowly now that the University of Johannesburg is rumoured to have plans of its own for building rentable student accommodation in Melville.
Says Lovell: "The rationale for investing in flats or larger homes to house students is inescapable. Parents will have to pay for student accommodation whether they own it or not. It simply makes good business sense to direct those resources into something that will, in all likelihood, provide a financial return at the end of the students study period.
"And the returns have been excellent, although they may be leveling off to some extent, perhaps for no other reason than that the banks will not continue ad infinitum to provide financing where they cannot see endless increases in values.
"Having said that however, once the property market in general resumes its strong growth, as is generally anticipated, so too will student-orientated properties and for the investor with a medium to long term view, that means an excellent opportunity."
Tuesday, June 8, 2010
Student Accommodation - Things to be taken care of!
People who like to invest in property are considered to have an edge over others. The phenomenal success brought forward by real estate sector has once again proved that property continues to earn even you are not working. We have realized it for our own benefit that world is becoming more of a single country and people are moving freely all the time to different places and students in particular. Student accommodation concept has reached unprecedented heights and more emphases are being laid as how to make it evergreen like any other industry. Student accommodation concept would always be there as long as we have educational institutions and universities offering overseas programs.
There are few things to take care of when one is putting his or her property on the market for student accommodation. First things first and one shall think of taking professional services. The easiest way out is to appoint a managing agency and let them take care of things in order. The best part is that you need to be bothered about the technical aspect and how to find suitable candidates for student accommodation. These professionals are equipped with sufficient amount of techniques to put your interests forth than any other thing. 'Joint and several liability" clause is another such term that ensures peace of mind to owners as he or she has not to run after every single tenant but a fixed amount would be set as a whole. Now, all tenants would be responsible individually or collectively to pay it on monthly basis.
Another important thing to be mentioned over here is that to involve parent's participation. It is the single most influential factor before striking the deal. It is good to have fair expectations from each other. All such and more measures are meant to decrease the ratio of failed cases and bring hope and light to this industry. Student accommodation prospect is vast in nature and certainly future belongs to it. Be it students or the owner, student accommodation agreement shall serve both the sides. At the end, we are talking about students who would eventually pay for the services and landlords are supposed to provide basic facilities.
So, things should be in tandem and work accordingly. The last bit is about the number of people who are going to accommodate as it is again a debatable issue. It is always good to clear the doubts first and then walk together peacefully. Student accommodation is an interesting discussion to have as it is still relatively new and progressive in nature. So, better are chances our when we talk more and participate hugely in numbers. The only way to succeed is by asking more and after.
Article Source: http://EzineArticles.com/?expert=Simon_Mahoney
There are few things to take care of when one is putting his or her property on the market for student accommodation. First things first and one shall think of taking professional services. The easiest way out is to appoint a managing agency and let them take care of things in order. The best part is that you need to be bothered about the technical aspect and how to find suitable candidates for student accommodation. These professionals are equipped with sufficient amount of techniques to put your interests forth than any other thing. 'Joint and several liability" clause is another such term that ensures peace of mind to owners as he or she has not to run after every single tenant but a fixed amount would be set as a whole. Now, all tenants would be responsible individually or collectively to pay it on monthly basis.
Another important thing to be mentioned over here is that to involve parent's participation. It is the single most influential factor before striking the deal. It is good to have fair expectations from each other. All such and more measures are meant to decrease the ratio of failed cases and bring hope and light to this industry. Student accommodation prospect is vast in nature and certainly future belongs to it. Be it students or the owner, student accommodation agreement shall serve both the sides. At the end, we are talking about students who would eventually pay for the services and landlords are supposed to provide basic facilities.
So, things should be in tandem and work accordingly. The last bit is about the number of people who are going to accommodate as it is again a debatable issue. It is always good to clear the doubts first and then walk together peacefully. Student accommodation is an interesting discussion to have as it is still relatively new and progressive in nature. So, better are chances our when we talk more and participate hugely in numbers. The only way to succeed is by asking more and after.
Article Source: http://EzineArticles.com/?expert=Simon_Mahoney
Student Accommodation helping the real estate market
The term student accommodation has been referred to the requirement of students wanting to pursue higher education and seeking a place to settle down in the main cities where such education is available. Many leave their homes in the hinterland and make their way into the main cities where they know the standards of education are much better. Many foreign students also make their way into cities that are known to provide good higher education standards are therefore require help in the form of student accommodation.
The trend is now very clear. Many individuals are pursuing higher education and are willing to relocate which is leading to this requirement. The captive accommodation already available with the universities and educational institutions are proving to be insufficient to hold so many students and they have no choice but to look elsewhere in the city. While some of the students do manage to shack up with seniors, others have to look for student accommodation facilities.
This demand for student accommodation has led to the creation of student areas in some of the towns. These are typically lodgings of low rent, are near to the education institutions and city centre and are within striking distance of leisure facilities such as gymnasiums, pubs, cinemas and sports clubs. These areas are often not fancied by their neighborhoods, due to negative experiences in the past with some of the students who may not have followed the discipline and good manners that are required when you stay close to civilian neighborhoods. Very often students have indulged in vandalism and rioting as a form of protest. Some of the students have also been involved in drug trafficking, prostitution and other anti social activities leading to a lack of confidence and faith in them. On other factor for this apathy is the poor upkeep of the facilities thanks to the changing nature of the residents each year.
There are such student areas in almost all major cities that provide good standards of higher education. The only positive point for residents close to such student accommodation areas is the fact that this demand for housing has led to a spurt in the real estate prices, contrary to perception. The demand from students is so strong for good housing that they are willing to pay a higher price for the accommodation. This has led some smart landlords looking to rent out their property to brand them as "student houses" in their advertisement so that they are able to attract the right student population for their property and rake in the spoils.
Some cities are however making attempts to provide a much better standard of student accommodation by providing some luxury electronic gadgets so that they can get the students to move in there. They know that students can pay more thanks to the high level of disposal income they have with them due to high student grants and loans.
The Leeds Metropolitan University is the largest university and students flock to this university for their higher studies. They find Student Accommodation Leeds with assistance from Letting agents Leeds for this purpose.
Article Source: http://EzineArticles.com/?expert=Simon_Mahoney
The trend is now very clear. Many individuals are pursuing higher education and are willing to relocate which is leading to this requirement. The captive accommodation already available with the universities and educational institutions are proving to be insufficient to hold so many students and they have no choice but to look elsewhere in the city. While some of the students do manage to shack up with seniors, others have to look for student accommodation facilities.
This demand for student accommodation has led to the creation of student areas in some of the towns. These are typically lodgings of low rent, are near to the education institutions and city centre and are within striking distance of leisure facilities such as gymnasiums, pubs, cinemas and sports clubs. These areas are often not fancied by their neighborhoods, due to negative experiences in the past with some of the students who may not have followed the discipline and good manners that are required when you stay close to civilian neighborhoods. Very often students have indulged in vandalism and rioting as a form of protest. Some of the students have also been involved in drug trafficking, prostitution and other anti social activities leading to a lack of confidence and faith in them. On other factor for this apathy is the poor upkeep of the facilities thanks to the changing nature of the residents each year.
There are such student areas in almost all major cities that provide good standards of higher education. The only positive point for residents close to such student accommodation areas is the fact that this demand for housing has led to a spurt in the real estate prices, contrary to perception. The demand from students is so strong for good housing that they are willing to pay a higher price for the accommodation. This has led some smart landlords looking to rent out their property to brand them as "student houses" in their advertisement so that they are able to attract the right student population for their property and rake in the spoils.
Some cities are however making attempts to provide a much better standard of student accommodation by providing some luxury electronic gadgets so that they can get the students to move in there. They know that students can pay more thanks to the high level of disposal income they have with them due to high student grants and loans.
The Leeds Metropolitan University is the largest university and students flock to this university for their higher studies. They find Student Accommodation Leeds with assistance from Letting agents Leeds for this purpose.
Article Source: http://EzineArticles.com/?expert=Simon_Mahoney
Sunday, May 2, 2010
Student landlords benefit form the shortage in rental houses
By Samul Swan
At last there is some good news in the UK rental property markets as demand is now outstripping supply. This points to a positive future for landlords as their property should continue to be in high demand.
One consequence of the increased requirement for let property is that as a landlord you should be able to find a tenant more quickly. According to the Association of Residential Lettings Agents during the first quarter of 2010 the average vacant period for rental property dropped to just 3.6 weeks.
Student landlords in popular university towns and cities may find that the property shortage is even more acute. Higher demand for property should fuel higher rents and fewer periods of vacancy for let property - all of which is good news for student landlords.
Get better rental income on your let property
Following the recent economic downturn, many young people have decided to pursue a degree or higher qualification rather than enter the workforce. There are now 2.4 million students in the UK, many of which will be looking for let property. During the past nine months there has been a 45% increase in demand for student housing and the trend looks set to continue. By tapping into this market, student landlords can expect to see a better gross return on their investment.
Generally speaking, rents are higher for student property than a comparable buy-to-let property - often by as much as 10%. A landlord with the right type of property in the right location for students can look forward to better yields on their rental income. It is anticipated that demand for student lets in cities such as Leeds, London, Manchester and Sheffield will continue to rise, making these locations ideal for student landlords.
Keep property vacancies to a minimum
Any landlord will tell you that one of their main priorities is to keep periods of vacancy to a minimum. One of the advantages of letting property to students is that the house or flat will have tenants for nearly all of the year. Moreover, the landlord will know months in advance if the property will be need for the following academic year, enabling them to plan ahead.
How u-rooms.com can help
If you have a property to let within easy reach of a UK university, let u-rooms.com help you tap into the student rental market. Students are currently starting to look for a flat or house share for the next academic year so now is a great time to move into this market. At u-rooms.com we offer a very competitively priced, yet comprehensive service, designed to make your life easier and help you find the right tenants quickly. Simply visit us at u-rooms.com and list your property. For more information about marketing rental property contact or to list your property contact u-rooms.com.
Article Source: http://EzineArticles.com/?expert=Samul_Swan
At last there is some good news in the UK rental property markets as demand is now outstripping supply. This points to a positive future for landlords as their property should continue to be in high demand.
One consequence of the increased requirement for let property is that as a landlord you should be able to find a tenant more quickly. According to the Association of Residential Lettings Agents during the first quarter of 2010 the average vacant period for rental property dropped to just 3.6 weeks.
Student landlords in popular university towns and cities may find that the property shortage is even more acute. Higher demand for property should fuel higher rents and fewer periods of vacancy for let property - all of which is good news for student landlords.
Get better rental income on your let property
Following the recent economic downturn, many young people have decided to pursue a degree or higher qualification rather than enter the workforce. There are now 2.4 million students in the UK, many of which will be looking for let property. During the past nine months there has been a 45% increase in demand for student housing and the trend looks set to continue. By tapping into this market, student landlords can expect to see a better gross return on their investment.
Generally speaking, rents are higher for student property than a comparable buy-to-let property - often by as much as 10%. A landlord with the right type of property in the right location for students can look forward to better yields on their rental income. It is anticipated that demand for student lets in cities such as Leeds, London, Manchester and Sheffield will continue to rise, making these locations ideal for student landlords.
Keep property vacancies to a minimum
Any landlord will tell you that one of their main priorities is to keep periods of vacancy to a minimum. One of the advantages of letting property to students is that the house or flat will have tenants for nearly all of the year. Moreover, the landlord will know months in advance if the property will be need for the following academic year, enabling them to plan ahead.
How u-rooms.com can help
If you have a property to let within easy reach of a UK university, let u-rooms.com help you tap into the student rental market. Students are currently starting to look for a flat or house share for the next academic year so now is a great time to move into this market. At u-rooms.com we offer a very competitively priced, yet comprehensive service, designed to make your life easier and help you find the right tenants quickly. Simply visit us at u-rooms.com and list your property. For more information about marketing rental property contact or to list your property contact u-rooms.com.
Article Source: http://EzineArticles.com/?expert=Samul_Swan
Wednesday, March 24, 2010
New Price Guarantee
Price Guarantee
At Let and Stay we are so confident in the price that you pay for our service and quality offering that we will not only match but beat any written qoute for accommodation based on the following conditions;
- the accommodation is of similar quality,
- in the same suburb,
- for the same lease term.
Bring your written, verifiable qoute to the office and we will beat the price you pay for the accommodation!
At Let and Stay we are so confident in the price that you pay for our service and quality offering that we will not only match but beat any written qoute for accommodation based on the following conditions;
- the accommodation is of similar quality,
- in the same suburb,
- for the same lease term.
Bring your written, verifiable qoute to the office and we will beat the price you pay for the accommodation!
Monday, March 1, 2010
Student Accommodation under the spotlight
Geraldine Connell
28 February 2010
Could tax changes to make student accommodation cheaper be on there way?
One of the interesting VAT proposals in the Budget is a review and possibly an amendment which addresses the shortcomings of the VAT legislation relating to accommodation as either commercial or residential. In particular, student accommodation appears to be the focus of the change.
It is well known that South Africa's insufficient student housing accommodation has reached crisis levels - there are far more students requiring accommodation than can be catered for at present. The Department of Higher Education and Learning is anxious to resolve this problem quickly and is increasing funding for student accommodation. Furthermore, educational institutions are encouraged to provide student accommodation as cheaply as possible.
The VAT Act exempts certain supplies from VAT, such as education, passenger transport by road and the letting out of a dwelling. The purpose of exempting supplies from VAT is to reduce the ultimate cost to the end-user by not charging him VAT. Ironically, such a mechanism may sometimes not actually reduce the cost to the end user since the VAT incurred by the supplier becomes a cost and is ultimately on-charged to the end user. So for example, the VAT incurred on acquiring a flat cannot be claimed by the person who lets out that flat as a dwelling.
On the other hand, commercial accommodation in a flat which is supplied together with so-called 'domestic goods and services' is subject to 14% VAT if the total annual receipts for that supply exceed R60 000. So one major difference between whether a supply of accommodation is subject to VAT or exempt, depends on whether the accommodation comes with "domestic goods or services". What are these services?
They include any of the following: cleaning and maintenance; electricity, gas, air conditioning or heating; a telephone, television or similar article; furniture and fittings; meals or laundry. If the accommodation is supplied with any of these, it is subject to 14% VAT.
A "dwelling" is defined as any place used primarily as a natural person's place of residence. The letting of such a place is exempt from VAT provided that no domestic goods and services are provided and that the accommodation is provided on a semi-permanent basis, much like acquiring a home. Confusion could arise here as a result of the fact that a "dwelling" is defined to include fixtures and fittings that belong to it. Arguably, this could alter the tax treatment of the supply of the dwelling since it would also fall within the definition of commercial accommodation with domestic goods and services if the R60 000 income threshold were achieved.
On the surface, it appears that charging VAT on accommodation will make it more expensive for students, but this is not necessarily the case. Not only can the landlord claim back all the VAT on the capital and running costs thereby reducing the overheads, but the VAT Act gives a further concession. If the accommodation is provided for periods of more than 28 days, VAT is only payable on 60% of the all-inclusive charge for the accommodation and the domestic goods and services. The reason that only part of the value of such accommodation is taxed where an occupant stays longer than 28 days, is to place people living in commercial accommodation on a long-term basis on a similar footing to those renting ordinary domestic dwellings. Those living in commercial accommodation should not be paying materially more VAT on their basic accommodation than their residential counterparts.
It will be interesting to see whether the VAT law amendments increase the ambit of the exempt supplies in an attempt to make student accommodation cheaper. Detailed calculations should be done to assess whether exemption from VAT really does lower the price of accommodation or not.
*Geraldine Connell is from Deloitte
28 February 2010
Could tax changes to make student accommodation cheaper be on there way?
One of the interesting VAT proposals in the Budget is a review and possibly an amendment which addresses the shortcomings of the VAT legislation relating to accommodation as either commercial or residential. In particular, student accommodation appears to be the focus of the change.
It is well known that South Africa's insufficient student housing accommodation has reached crisis levels - there are far more students requiring accommodation than can be catered for at present. The Department of Higher Education and Learning is anxious to resolve this problem quickly and is increasing funding for student accommodation. Furthermore, educational institutions are encouraged to provide student accommodation as cheaply as possible.
The VAT Act exempts certain supplies from VAT, such as education, passenger transport by road and the letting out of a dwelling. The purpose of exempting supplies from VAT is to reduce the ultimate cost to the end-user by not charging him VAT. Ironically, such a mechanism may sometimes not actually reduce the cost to the end user since the VAT incurred by the supplier becomes a cost and is ultimately on-charged to the end user. So for example, the VAT incurred on acquiring a flat cannot be claimed by the person who lets out that flat as a dwelling.
On the other hand, commercial accommodation in a flat which is supplied together with so-called 'domestic goods and services' is subject to 14% VAT if the total annual receipts for that supply exceed R60 000. So one major difference between whether a supply of accommodation is subject to VAT or exempt, depends on whether the accommodation comes with "domestic goods or services". What are these services?
They include any of the following: cleaning and maintenance; electricity, gas, air conditioning or heating; a telephone, television or similar article; furniture and fittings; meals or laundry. If the accommodation is supplied with any of these, it is subject to 14% VAT.
A "dwelling" is defined as any place used primarily as a natural person's place of residence. The letting of such a place is exempt from VAT provided that no domestic goods and services are provided and that the accommodation is provided on a semi-permanent basis, much like acquiring a home. Confusion could arise here as a result of the fact that a "dwelling" is defined to include fixtures and fittings that belong to it. Arguably, this could alter the tax treatment of the supply of the dwelling since it would also fall within the definition of commercial accommodation with domestic goods and services if the R60 000 income threshold were achieved.
On the surface, it appears that charging VAT on accommodation will make it more expensive for students, but this is not necessarily the case. Not only can the landlord claim back all the VAT on the capital and running costs thereby reducing the overheads, but the VAT Act gives a further concession. If the accommodation is provided for periods of more than 28 days, VAT is only payable on 60% of the all-inclusive charge for the accommodation and the domestic goods and services. The reason that only part of the value of such accommodation is taxed where an occupant stays longer than 28 days, is to place people living in commercial accommodation on a long-term basis on a similar footing to those renting ordinary domestic dwellings. Those living in commercial accommodation should not be paying materially more VAT on their basic accommodation than their residential counterparts.
It will be interesting to see whether the VAT law amendments increase the ambit of the exempt supplies in an attempt to make student accommodation cheaper. Detailed calculations should be done to assess whether exemption from VAT really does lower the price of accommodation or not.
*Geraldine Connell is from Deloitte
Monday, February 1, 2010
Commune Policy grace period deadline looms
By Thuli Malinga: Northcliff Melville Times
Week ending 29 January 2010
The grace period for the new commune policy which started in August last year is coming to an end and slumlords who continue operating illegally will have to face the law come next month.
The new commune policy was started as a result of the continuing conflict between residents and commune residents.
Some of the concerns raised by the community included noise problems resulting from regular partying by students, overcrowded dwellings and the alteration of the suburbs character in some of the properties.
In order to regulate such issues city council proposed a new policy where commune owners would have to adhere to the following:
There should be a maximum of 10 tenants per commune including the caretaker.
There should be not more than two people in any double bedroom.
Provision shall be made for a common room or rooms and kitchens in the commune.
There should be one bathroom per four tenants
The owner or caretaker of the commune should permanently reside on the property for management purposes and accountability.
Commune management should ensure that a compulsory A3 sign is placed on the front boundary of the property.
This sign should have a 24- hour telephone and email address for residents to contact the manager.
City council has warned that compliance of these by-laws will be monitored by a task team. This includes development management, environmental health, Saps, Johannesburg Metropolitan Police Department, councilors, student accommodation forums and residents associations.
They will also have partnerships with tertiary institutions alike. More information on the commune policy can be obtained from the City of Johannesburg website.
Week ending 29 January 2010
The grace period for the new commune policy which started in August last year is coming to an end and slumlords who continue operating illegally will have to face the law come next month.
The new commune policy was started as a result of the continuing conflict between residents and commune residents.
Some of the concerns raised by the community included noise problems resulting from regular partying by students, overcrowded dwellings and the alteration of the suburbs character in some of the properties.
In order to regulate such issues city council proposed a new policy where commune owners would have to adhere to the following:
There should be a maximum of 10 tenants per commune including the caretaker.
There should be not more than two people in any double bedroom.
Provision shall be made for a common room or rooms and kitchens in the commune.
There should be one bathroom per four tenants
The owner or caretaker of the commune should permanently reside on the property for management purposes and accountability.
Commune management should ensure that a compulsory A3 sign is placed on the front boundary of the property.
This sign should have a 24- hour telephone and email address for residents to contact the manager.
City council has warned that compliance of these by-laws will be monitored by a task team. This includes development management, environmental health, Saps, Johannesburg Metropolitan Police Department, councilors, student accommodation forums and residents associations.
They will also have partnerships with tertiary institutions alike. More information on the commune policy can be obtained from the City of Johannesburg website.
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