Now that you all know me a little better, let's kick of with a few developments that took place in the world of sectional titles lately.

All trustees, body corporates and owners of sectional titles should be aware of the new Interpretation Note 64 (Issue 4) issued by SARS.  In terms of section 10(1)(e) of the Income Tax Act, body corporates are exempt from paying income tax on levy income. In terms of the new Interpretation Note 64 however, not all income received by a residential scheme is exempt.

The following levies will qualify for an exemption:

1. General levies for the day-to-day management of the scheme
2. Special levies raised by the scheme
3. Building penalty levies for owners who fail to complete the building within the set time frames
4. Reserve fund levies 

The following levies will not qualify for an exemption:

1. Fines payable by owners for breach of the conduct rules, seeing as these fines are not collected for purposes of the-day to-day maintenance of the scheme.
2. Late payment fees, or interest on late levy payments
3. Further payments that will also not qualify for exemption may include, for example, income earned on renting out facilities in the scheme, or investment income.

Residential schemes will still qualify for a basic exemption of R50 000.00 on the total income received from non-exempt levies.

Also, be on the lookout for my latest news article on our website that will deal with the question of when owners may institute legal action on behalf of the body corporate, as well as the steps to be taken in such a situation.