The Types of Property Ownership Options
In South Africa, there are many types of property ownership
options. Of course, the option you choose is mainly based
on how personally involved you wish to become with property
you want to own. For instance, you may be wanting to buy a
home as your primary residence, a second home, or as a rental
property. Maybe you are looking for property to purchase for
investment purposes or adding to your total assets. Whatever
you reason, before jumping into buying a property, you should
become familiar with the ownership options available.
Freehold
Out of all of the property ownership types, freehold ownership
happens most often. This kind of ownership gives the owner
complete hold over the property's title. Freehold ownership
is applicable to either an individual or a business. And because
the owner has control over the property, they can use it as
they like, sell it when they please, and utilize it for loan
collateral.
Sectional
A sectional title has multiple owners who each control a
different piece of one property, which is many times the case
in a town house row or several house built on the same piece
of land. And if the sectional title property has communal
features, such as a swimming pool or clubhouse, all owners
are able to use them.
Syndication
When several people collectively invest in a single property,
it is a syndication ownership. This usually happens when the
cost of a property is too great for one person to purchase
alone.
Property Company
Companies interested in buying properties for exclusive business
use will enter into property company ownerships. Investors
will create a property company in order to invest in properties
without holding the shareholders of their companies liable.
This is a common occurrence for large, Johannesburg Stock
Exchange listed companies.
Share Block Company
Instead of property company being liable for any taxes or
assets associated with a company, a share block will allow
each shareholder an ownership piece of all properties as well
as all tax liabilities linked to them. And because each shareholder
owns a part of the properties in a share block, they are also
allowed to use the property.
Time Share
A time share is a property where each owner is entitled to
use it for a specific period of time during every calender
year. Be aware that a time share does not mean a person will
have a hold over the property; it only means a person can
use the property. If one cannot use their time share at the
particular time they paid for it, the time can always be exchanged
or used by someone else. Of course, whether or not the time
share is in use, levies will still need to be paid.
Listed Property
If someone wants to invest in a property without having a
physical hold over the property, they can invest in a listed
property; for example, a trust. This ownership option requires
that the property will be placed among the listings on the
Johannesburg Stock Exchange, meaning it can be traded.
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