Real Estate updates

Guernsey

Plans for Guernsey deposit protection scheme to be laid out before end of 2018
  • Guernsey
  • 05 October 2018

The Office for the Environment and Infrastructure recently announced that a new deposit protection scheme will be planned before the end of 2018. The announcement follows news that a local estate agent has ceased trading, leaving some tenants and landlords uncertain of their position with regard to rents and deposits that were being held by that agent. The proposal is likely to be that Guernsey should introduce a similar, if not identical, scheme to that already in place in Jersey.


Indonesia

Contributed by Makarim & Taira S
Five issues commonly encountered in commercial building leases
  • Indonesia
  • 01 March 2019

Leasing is an easy way for businesses to acquire office space in a prime location and helps them to free up working capital. Thus, a carefully prepared lease agreement is invaluable for the lessee and lessor. As a number of issues may be encountered when leasing a building for office space, it is important to consider these ahead of time.


Mexico

Tourism real estate: legal considerations for developers
  • Mexico
  • 12 April 2019

Mexico attracts a large number of tourists, and real estate to support this booming industry is frequently being developed by investors. As Mexico has an abundance of natural resources, tourism developments often take place in a range of different ecosystems, such as forests, beaches and jungles. This article examines the main legal issues that developers should consider when planning a real estate project in Mexico.

Maximising your real estate returns with fractional ownership
  • Mexico
  • 22 February 2019

As with any other type of investment opportunity, when investing in real estate, it is crucial to limit the risks as much as possible while maintaining maximum returns. Fractional ownership is a good option in this regard, irrespective of whether a party wants to develop real estate or invest in personal real property. Often mistakenly compared with the timeshare model, the fractional ownership model has unique characteristics which can make investing in real estate more feasible and manageable.

Title insurance and indigenous rights
  • Mexico
  • 02 November 2018

Procuring title insurance has become common practice in real estate transactions for both lenders and owners. As title insurance is a type of indemnity insurance which covers financial loss from title defects, it protects policyholders from past events which could affect the property's transfer. However, certain aspects of real estate development which are unique to Mexico must be taken into account in this regard.

Prior consultation with indigenous communities: key requirement for real estate developers
  • Mexico
  • 31 August 2018

Convention 169 – Indigenous and Tribal Peoples Convention establishes that indigenous peoples or communities must be consulted on any legislative or administrative act that may directly affect them. Companies that intend to develop or invest in real estate projects in Mexico should therefore consider community consultation as part of their feasibility criteria.

How to acquire real estate in Mexico: alternate investment vehicles
  • Mexico
  • 20 July 2018

Acquiring real estate in Mexico can be cumbersome and time consuming, particularly for foreign investors. The Constitution forbids foreign individuals and entities from holding direct ownership of land or waters in the geographic area known as the 'restricted zone'. However, Mexican law allows foreign individuals and entities to use a foreign trust to acquire beneficial interests in real estate that is located in the restricted zone where it is intended to be used for residential or commercial purposes.


South Africa

Clarification in SARS' latest issue of Interpretation Note 64
Cliffe Dekker Hofmeyr
  • South Africa
  • 11 January 2019

The South African Revenue Service recently published the fourth issue of Interpretation Note 64, which seeks to provide guidance on the application and interpretation of Section 10(1)(e) of the Income Tax Act. With the rising prevalence of complex developments, security estates, shopping centres, wellness compounds and high-rise flats in South Africa, body corporates, homeowners' associations and share block companies are commonplace and clear guidelines as to the taxation of these entities is imperative.

Residential property developers face cash-flow crunch due to VAT on temporary letting of units
  • South Africa
  • 06 April 2018

Many residential property developers will begin 2018 with a major cash-flow challenge, as they may be faced with a substantial value added tax (VAT) liability in respect of the temporary letting of residential units which have been developed for resale. It is hoped that the South African Revenue Service and the National Treasury will urgently address the problems with regard to the VAT rules concerning the change-in-use adjustments for property developers.


Switzerland

Contributed by Pestalozzi Attorneys at Law
Brexit: changes for UK citizens on Swiss property market
  • Switzerland
  • 15 March 2019

While it remains unclear when and on what terms Brexit will happen, the United Kingdom and Switzerland recently signed an agreement on citizens' rights which covers the purchase and retention of real estate by UK citizens in Switzerland and vice versa. After Brexit, UK citizens with a legal and actual Swiss residence will require a permanent Swiss residence permit (C permit). Otherwise, they will be considered persons abroad and will be subject to the Lex Koller restrictions.

Swiss voters reject plan to freeze building zones
  • Switzerland
  • 22 February 2019

Swiss voters recently rejected an initiative that aimed to stop urban sprawl by freezing the overall size of building zones and strictly limiting exceptions that allow building activities outside building zones. While supporters of the initiative considered the current legal regime to be insufficient, opponents argued that the proposed initiative was overly strict, unable to accommodate cantonal and regional differences and inadequate to address population and economic growth.

Federal Supreme Court decision on compensation due to limitation of secondary homes
  • Switzerland
  • 16 November 2018

The Federal Supreme Court recently addressed for the first time whether the prohibition to build secondary homes on private property entitles landowners to compensation. The court ruled on the consequences of the withdrawal of a previously established right through an amendment of the law and clarified that the concept of private property is not a fixed notion inaccessible to change. There is no entitlement to a permanent definition of the concept of private property.

Federal government drops plan to tighten rules on foreign real property investments
  • Switzerland
  • 29 June 2018

In March 2017 the federal government submitted to public consultation several proposals to amend the legal regime governing foreign investments in Swiss real property. The vast majority of the comments received rejected the proposed amendments. While the government subsequently dropped its plan to amend the Lex Koller and a related ordinance, certain pending parliamentary motions may impact the Lex Koller regime in the medium term.

Levy on added value of land resulting from planning measures
  • Switzerland
  • 27 April 2018

Swiss legislation provides for adequate compensation for considerable advantages and disadvantages resulting from spatial planning measures. In particular, land that is newly allocated to a building zone substantially increases in value. Owners of such land will benefit from spatial planning activities without any contribution on their part. For reasons of fairness, these benefits are subject to a levy which is supposed to 'skim off' part of the added value.