Taxman and others, cometh

2016-09-22 06:00

FOR many years and throughout South Africa, some people who own second or third homes in one or other popular destination have, on an ad hoc basis, hired out their properties usually during peak season and at peak prices.

They see this as a means of not only realising a nice income but also to offset things like rates, levies and maintenance costs. When the income-generating weeks have come and gone, these owners have the luxury of their paid-for getaways for the rest of the year.

Some would say that this is a prudent way to own holiday homes, but unfortunately, these unethical part-time tourism practitioners do not always declare their rental incomes so in essence are in transgression of our tax regimen.

Furthermore it is likely that the said properties are not on the municipal books as a form of commercial enterprise which has ramifications in terms of rates and local authorisations, etc. I guess that municipalities are losing significant rates and other revenues as a result of non-disclosure of commercial activity by owners keeping under the radar.

In our hospitality industry and among our membership there are very committed owners and proprietors who ensure that they are compliant with all government and SARS requirements so it is a great pity that their honest operations can be undermined by certain unscrupulous people earning the proverbial buck by bucking the system.

It is grossly unfair that properties that do comply, pay taxes, advertise and register with all sorts of tourism organisations (all at cost) are from time to time faced with competition on an uneven playing field.

I know that the authorities are looking into this so that all income-deriving properties are properly registered with SARS, local authorities and tourism organisations and that letting agencies are compelled to ensure that properties are compliant in this regard.

It won’t be long before some sort of inspector goes knocking on doors armed with a mandate to fine or intention to prosecute.

Before the busy summer season comes around, I really urge those who are contemplating cashing in on tourism’s sacred cow to make sure they have all the right registrations in place - we have a membership officer who can assist.

So if you see somebody beneath a deerstalker, tweed attired, stooping over a magnifying glass and being towed by a saliva-spewing bloodhound, it could be the day the authorities decided to act firmly against those who are not playing ball. They are coming.

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