Advice should be sought prior to entering into any property transaction, following major tax changes passed by Parliament last week will impact future property purchases,” according to Grant Thornton.
The changes widen the tax net and essentially remove the ability for a developer to hold any property on capital account, warned Tax Director, Geodie Hooft.
“The changes mean that property developers, and those associated with them, will face much greater exposure to tax on property transactions,” he said.
“In a very broad sense, if you are associated with a property developer and you sell a property within 10 years, you may be exposed to tax on any profit that would ordinarily be considered a capital gain.”
The changes will affect any property acquired from the date the law is enacted, and in some circumstances, will affect land already held which is subject to improvements where they commence after the law change.
“It is unlikely that existing structures will continue to provide adequate protection from unintended tax consequences,” Hooft concluded.
source- financialalert
