While most people may understand the immediate function of a commercial property valuation, few realise the long-term benefits it can provide.
Here are a number of long-term payoffs for obtaining a commercial property valuation:
1. Estate or succession planning
In the event that a shareholder retires, dies or becomes disabled, the interest they previously held in the property must pass to the remaining shareholders, often in line with specific terms and conditions provided for in a ‘buy-and-sell agreement’.
Alternatively, it is left to specific beneficiaries or heirs as provided for in terms of a valid will.
2. Retirement planning
An annual valuation, like any other investment performance schedule, will provide insight into whether your property portfolio is performing in line with expectations of yield and capital growth. This is good to know when it comes to retirement planning.
3. To guide maintenance and renovation decisions
A property investment is one of the biggest investment decisions one is likely to make. However, he says there is a fine line between one’s duty to maintain the property and the temptation to continue renovating or developing the property, which can amount to overcapitalisation of the asset.
4.Capital gains tax
Should you intend selling a commercial property, where the sale price exceeds the initial cost of the property – taking into account allowable deductions at the same time, SARS will charge capital gains tax on the difference.
Original Source for this article : https://www.property24.com/articles/5-reasons-why-commercial-property-valuations-are-vital/24225