Monday, 11 June 2007

National Credit Act - Loopholes!

There's been alot of hoohaa about the latest South African national credit act as you may have noticed if you read all the financial and property related BLOGS.

About an hour ago I came across an article see Loopholes in National Credit Act. It's articles like this that really get my blood boiling because it makes originators look bad when they have to help clients...

According to Fin24 and John Chapman director of Rabie Property Group, there's a GREAT loophole in the new national credit act system, whereby if you register the bond in a CC or a Trust you'll bypass all the NCA laws and regulations.

1. As John mentioned, registering a bond through a CC just makes no sense due to the TAX benefits you would have to sacrifice.

2. What he forgets to mention is the following:
If you register a bond in a trust or cc i.e. ANY LEGAL ENTITY your bond costs are more than double.

For example on a bond amount of R 1 000 000.00 your costs would be R39370.00. IF you register the bond in a CC or TRUST you costs are R94 370.00. That's 3 x the bond registration costs that you'd normally pay.



Anonymous said...

So what sort of impact has the national credit act of south africa had on your business over the last 6 months?

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