Scott Pharoah made his debut to the property industry in 2015, by acquiring the Hyde Park Licence for Engel & Völkers in South Africa; he then expanded his portfolio to Houghton, Bedfordview and Midrand. This was just the start of more exciting things to come, as Scott just recently acquired the Sandton licence area. His network of property shops now covers a vast area in Johannesburg. Chantalle Bell, Feature Writer for Engel & Völkers Southern Africa, sat down with Scott to find out who he is when not investing in the real estate sector, what makes him tick and where he plans on heading from here on out…
The personal side of Scott:
Those of you who have met Scott will agree that you can’t help but notice his passion and love for all that he does. The exuberant, enthusiastic, positive energy he has for being part of an International Real Estate brand, and the Johannesburg city life is definitely infectious. He noted that he has seen the ins and outs of Johannesburg, and is yet to come across an area that he doesn’t like. “I can truly say that I love Johannesburg – every single corner”.
We started at the beginning and gained a peek into his younger years. Scott grew up in Limpopo in the small town called Duiwelskloof, at that time it only had a population of 2 000 people. He then moved to the big city, Johannesburg, to pursue his studies where he also managed to land his first job in sales, which he did whilst completing his studies. The vibe of the city became part of his blood, and he has now been living here for the past 27 years.
Scott says his passion lies in his family and his faith. He is very blessed to be able to have grown up with rock solid role models in both his parents and grandparents, and this played a big role in the success he has today. He now lives in Atholl, Sandton with his stunning wife of 14 years, and their 4 children aged 2, 5, 6 and 7, equally divided between 2 boys and 2 girls which keeps them quite busy most of the time, not leaving much time for ‘hobbies’. “I do believe that a hobby is just something which you enjoy, and I love any time which I can spend with my family. We have a rule of taking 2 dedicated holidays a year, where we completely go off-grid and quality family time is the agenda of the day. In today’s busy life, I think we tend to allow technology and work to distract us without us even noticing, and we sometimes just need to take a step back and focus on what is most important.
“I recently returned from our 2 week break at our holiday home in Mpumalanga and it has re-energized me completely, ready to get all the new ventures going – so even if one does not always have the time, I do believe you need to make time”. You also need something to take your mind off work when you cannot be on holiday, and during weekends they spend their time relaxing and unwinding at various restaurants in Johannesburg where they love the energy of the city. Scott highly recommends taking a family trip to 44 Stanley, Salvation Café, The Parks, Vovo Tello and New Town JHB to name a few. It is clear that his childhood dream of becoming a restaurateur is not completely dead – the passion is still alive and being lived.
Scott and property:
When asked whether he thinks that property is a good investment – Scott simply smiled with a bit of a frown, almost as to politely say, ‘I own 5 real estate licences – of course it’s a fantastic idea’. He says that in his opinion, next to gold, property is the investment that appreciates the most. After moving out of his parents’ home to Johannesburg, the first property he lived in was a room he rented above a double garage from an elderly couple. After he had a bit of capital built up, he proceeded to obtain his first property in 1997, which was a 2 bedroomed apartment for just R350 000 and it all just grew from there.
Scott noted that he can’t tell us where his dream home would be, as he is already living in it – in the heart of Atholl, although his ideal holiday home would be on the West Coast in Church Haven, Langebaan. He did however quickly answer our question with regards to his favourite room in the house without any hesitation or thinking – “It is definitely the playroom – it is our family’s heart. In this room anything goes. Although I do believe in discipline, I also believe that we all need a space to let our hair down – and this is what our kid’s playroom represents. It is a room where there are no rules – toys and crayons lying around… fabulous, organised chaos.
The Red & White side of Scott
The biggest risk which Scott ever took was leaving formal employment and taking the risk of opening his own business in 2004, this risk has turned out to be the biggest reward! He has since then only continued to expand his business portfolio with the addition of his first E&V shop in 2015.
Scott was introduced to the Engel & Völkers brand by way of visibility in his area, which led him to approach the Engel & Völkers Bryanston shop to assist with the marketing and selling of his property. Needless to say, this resulted in a successful sale and he was very happy with the service received.
The brand stuck with him, and when it came to the decision to expand his business interests to the real estate industry, Engel & Völkers was his next logical step as he loved the brand awareness, the shop concept and the exclusivity. He joined Engel & Völkers as the brand epitomises luxury, professionalism which translates into success. The brand also offers phenomenal systems, classic corporate governance and is truly an international brand.
He believes that the secret to owning a successful business is running a sales team, in a service industry that needs to revolve around good, solid and honest leadership of your staff. Promoting staff and being empathetic to both the buyer and sellers is the philosophy. At the coal face, agents need to be sensitive and understanding to the needs and wants of their clients. “In business, I view staff and clients equally as my responsibility to nurture”.
Any industry has its rewards and challenges, and we wanted to know what his experience has been on this front. Scott says the most gratifying side of real estate is the thrill of fulfilling people’s dreams and ambitions of being property owners. “You get to re-live the excitement of becoming a property owner. Think back on the day when you bought your first or last home, and that moment when you were handed the keys – it is hard to explain the feeling, but I am sure that all property owners will be able to relate”. On the opposite side he also shared his most challenging aspect, which he noted to be maintaining motivation levels of staff in incredibly tough economic times. He added a bit of advice to newcomers to the industry and that is to never let up on their dreams despite the adversities.
The future according to Scott
We all have goals and targets of what we would like to achieve, and Scott is no different. In fact he has already marked out the timeline and is on track to achieve all of his set goals.
Scott is busy getting his Johannesburg office set up as a MMC (Metropolitan Market Centre) in order to get it recognised as an official MMC by Germany. “The ultimate goal is to be Africa’s ‘Manhattan office’, the first of its kind on the continent. It is not a matter of if it will happen; it’s simply a matter of when”.
As we mentioned earlier, they are indeed on track with their plans and we wanted to know what exactly has been happening and what they have been busy with. Between his 5 shops, he will have a team leader for each area, which is assisted by admin staff to support the team in reaching their success. They are currently looking for managers to head up these positions as Scott is looking for exceptional individuals who will share his dream of where the company needs to be. “I believe one needs to utilise any opportunity to its max, so I am embracing this feature, by inviting anyone who reads this article, and feels as passionate about the industry and growth as I do, to contact me about filling one of these positions”.
We almost need an organigram to keep track of the empire which Scott is busy setting up, but we have tried to keep up. Starting at the top, Scott is hands-on involved in the business, but believes in having a strong team who can run with things. For this specific task, he has appointed Debbie Robertson as Operations Manager of the entire group. Debbie is more than qualified for the position. Her career in E&V has grown immensely over the years, starting off as an intern agent; she used the expertise she had acquired over the years to grow into the Team Leader position at the Engel & Völkers Midrand office. In just a short time another opportunity came across her path, and she is now the Operations Manager for all 5 of the shops.
Debbie will be overseeing all 5 team leaders mentioned above, as well as the sub-divisions which are already in place. These include dedicated teams to service all areas of the industry and company. “We have a legal division headed up by Kiki Smith, our in-house attorney who will oversee all the contracts, together with her legal apprentices. Next will be our HR Manager to look after our staff and their needs (we are currently also looking for the right candidate – applications are welcome). Our finance department is overseen by Brendan Pharoah and our in-house marketing by Robert Ogall who looks after the social media, branding and events side.
Scott’s vision is to gain a sizeable and dominant market share in all of their areas in the next year, and whilst he understand this will take time, their teams are driven and pushing towards exclusive listings and gaining market share on a daily basis. With their support staff structure they have in place, there is no doubt that anyone will be able to make a success of their career in real estate, and Scott & Debbie invite candidates for a cup of coffee to see their offering in real time.
If you share Scott’s passion and vision, feel free to make contact and meet him yourself and chat about the opportunities available – or even if you simply feel you would like to meet this ball of energy in person – life is full of possibilities…
At first glance, Capital Gains Tax (CGT) may seem like yet another thing to worry about when completing a tax return, but it needn’t cause confusion. CGT is not a separate tax but forms part of income tax, which is taxed at a lower effective tax rate than ordinary income. Capital Gains Tax is basically a tax on the resale of assets. Anyone that disposes or sells their fixed assets or following the death of the asset owner, is liable for CGT.
When submitting your annual income tax return, any gains or losses based on a transaction during that period must be declared and submitted. “This is where the confusion can occur and it is up to the taxpayer to prove that certain sums were capital, and not revenue. For instance if a property was intentionally purchased with the idea of generating a profit, it would be considered as revenue. But if the intention was as a financial investment, this would be capital” explains Craig Hutchison, CEO Engel & Völkers Southern Africa.
Investors need to ensure they keep proof of their objective of purchasing the asset to avoid the normal revenue tax. SARS is at liberty to question the objectives of the investor if there are frequent property transactions, and might very well consider this as a revenue tax. If the homeowner keeps the property for personal long-term capital growth, SARS will see any profit on this as a capital gain.
There are a many tax tests implemented by SARS to determine whether to implement a capital or revenue tax. For instance, if the buyer purchased a home for personal use (primary residence) this will be exempt from CGT, with certain limitations. SARS considers the first R2 million gain on the sale of a primary home as CGT exempt. Homeowners who use part of the home for business may be liable for different tax structures.
If homeowners understand the basic difference between capital and revenue gain then at least half the battle is won, as everyone always strives to keep their payable tax to a minimum. If you are selling property or intending to, its best you read up on whether or not you need to pay CGT on the profits you make. Here are some pointers to give you a heads up.
When did CGT come into play?
Instituted in South Africa on 1 October 2001, this date is considered the “valuation date”, and only gains made on a property from this date is liable for CGT. This means that while any individual selling a property is liable for CGT, the value on which CGT will be calculated will be based on the value of the property as at 1 October 2001, and the gain made from this date, up to the date of sale. Any profits accrued from this date onwards on the sale of specific capital assets will be taxed with CGT.
Who is liable to pay CGT?
Taxpayers, including individuals, trusts, companies and close corporations, will be taxed on the profit they make when they sell an asset or property. A resident, as defined in the Income Tax Act 58 of 1962, is liable for CGT on assets located both in and outside South Africa. A non-resident is liable to CGT only on immovable property in South Africa or assets of a “permanent establishment” (branch) in South Africa. Certain indirect interests in immovable property such as shares in a property company are deemed to be immovable property.
Some persons such as retirement funds are fully exempt from CGT. Public benefit organisations may be fully or partially exempt. Normal rental income from a property is revenue which is declared on your annual income statement and therefore not subject to CGT.
When should it be paid?
CGT becomes payable when you receive your income tax assessment (IT34). As a registered taxpayer you will simply declare your capital gains and losses in your return of income covering the relevant year of assessment. Keep the records necessary to determine a capital gain or loss in a safe place as many years may elapse, between the time you acquire an asset and dispose of it.
If you are buying South African immovable property from a non-resident seller you must complete form NR02 and an IRP6(3) using the sellers income tax reference number and withhold the tax at the rate prescribed in section 35A(1). You may withhold at a lower rate of tax if the seller supplies you with a tax directive from SARS authorising you to withhold at a lower rate. You must then submit the NR02 and IRP6 (3) together with your payment to SARS. If the seller is not registered for income tax, the NR02 and offer to purchase must be forwarded to email@example.com so that the seller can be given an income tax reference number before payment is due.
A non-resident seller of immovable property may be entitled to request that tax be withheld at a lower or even zero rate under section 35A(2). The reasons why a sale would attract a lower rate of CGT will depend on the facts of the particular case, for example, the person may be fully exempt from CGT, such as a foreign state, or in the case of an individual, having a lower level of taxable income or have disposed of the property at a loss. To request a tax directive you must complete form NR03 and submit it together with the offer to purchase, tax calculation and supporting documentation to firstname.lastname@example.org or use one of the other submission methods described on the form.
For the purposes of provisional tax a taxable capital gain is excluded from the basic amount. If you are not permitted to use the basic amount for the purposes of your second provisional tax payment you will have to take into account any taxable capital gain that arose or will arise during the year of assessment in estimating your taxable income. Likewise, a taxable capital gain must be taken into account when making any third topping up provisional tax payment.
The withholding tax must be paid to SARS:
- within 14 days of the date on which the amount was withheld by a resident buyer;
- within 28 days of the date on which the amount was withheld by a non-resident buyer.
The above will all be managed by the conveyancing attorney managing the transfer of the property.
While this is a very broad overview of what to expect when it comes to CGT, it is always advisable to seek professional assistance to ensure all regulations are complied with and calculations are done accurately.
Your garage must keep up with your needs and lifestyle. Aside from housing your car, it is one of the most useful parts of the home; it is used for a variety of things, such as storage, a DIY workshop or maybe even a man cave.
“When choosing a home, the garage is often overlooked as we get so caught up in the beauty of the home, but it is something which is worth spending a bit more time on, and to consider what you would want to use it for ” notes Craig Hutchison, CEO Engel & Völkers Southern Africa.
Craig continued with some suggested questions one should ask yourself: With today’s fixation on security – Does the garage lock? Does it have automated doors for the added security of not having to get out of your car giving possible prowlers time to stop you before you are safely in your home? If you drive a big car, will it fit into the length and height? Do you need direct access into the house or prefer a separate space away from the main building?
If you have however already settled on your dream home and overlooked the space you require, it is not too late. The reality of having a functional work space in your garage, while still being able to store the necessities and park a car, need not feel like an impossible dream – there are a few things you could do to fix your current situation.
Spring is here and you’ve no doubt got to sprucing up your home for the season, now it is the garages’ turn.
Start off with upgrading your garage doors. It is after all what we see first and can be seen as the eyes of the house. Replacing old doors or alternatively just adding a new coat of varnish or paint could make a huge difference “Well maintained garage doors are the key to enhancing curb appeal and can have a major impact on your home’s appearance and value” Craig advised.
Common Garage Door Materials
Wood doors range from inexpensive, to very expensive.
- The costs are mostly related to the material the door is made of. A lightweight wooden frame, filled with foam insulation and wrapped in plywood is more affordable, whilst true frame-and-panel doors made of durable mahogany, redwood or cedar will cost a bit more.
- Wooden doors are the visually attractive option.
- However take note that they could carry a short warranty and require frequent repainting or refinishing, especially if you live in a damp climate.
Steel leads the pack because it is relatively inexpensive yet tough with low maintenance.
- Bare steel rusts, so you need to touch up scratches promptly.
- High-quality steel doors may have lifetime warranties on the hardware, laminations between the steel and any insulation, and factory-applied paint.
- Budget doors tend to have shorter warranties on some components, such as paint and springs.
Aluminium doors are inexpensive, sturdy, and rust-proof with heavy-duty extruded frames and dent-resistant laminated panels.
- These doors have aluminium frames and panels made of other materials, such as high-density polyethylene.
- Because of its light weight, aluminium is a good choice if you have an extra-wide double door; it won’t put as much strain on the operating mechanism.
Next we look at the floor. You want the most durable, good looking, and longest lasting floors. Standard concrete floors are functional, but, with a little extra effort, they can also be attractive. Give the floors a makeover with splash of paint, new tiles or rubber mats.
Garage flooring is to divide into two primary categories:
Floor coatings – If your garage floor is stained with oil, grease or even paint, you can easily give it new life with some epoxy floor paint. This will also increase the perceived worth of your home. Floors made from cements or concrete can actually deteriorate pretty quickly.
- Pro: Epoxy floor paint resists solvents and chemicals, as well as being water resistant and easy to clean. You also have a non-skid option.
- Con: Though durable and resistant, you will have to replace it eventually. Once the epoxy is applied, changing colors or designs can be a labour-intensive and costly endeavour. In those situations where the floor has to be repaired, removing the coating is quite extensive and difficult.
Floor coverings – These are products that are set on top of the garage floor and can be removed at any time. There are three basic types of garage floor coverings– porcelain garage tiles, 100% PVC interlocking floor tiles and rubber mats. These are hardwearing, remarkably durable, and resistant to most corrosive chemicals whilst also aesthetically pleasing.
- 100% PVC interlocking floor tiles – The ease and simplicity of installing these inexpensive interlocking tiles has made this flooring option increasingly popular. However inexpensive tiles can look cheap if they are not professionally installed. Tiles may come apart at the seams, creating tripping hazards.
- Porcelain garage tiles – These tiles are hardy and tough, they can be slippery when wet so maybe not a good idea in a damp garage, depending on which tile you choose this option could get quite costly.
- Alternatively you can roll out a mat – Garage floor mats come in a variety of styles and colors. It’s the least expensive option and may be a temporary quick fix; however its lifetime is a lot shorter and will have to be replaced often.
The Walls & Space
Once your garage doors & floors are form you can now de-clutter the area, throw out anything that you have not needed to use in a year and sort out all your tools and equipment. Most people use their garage as general storage point and it can quickly turn in to a cluttered mess. No matter how large your garage is, you could always use a little more room.
Here are 9 tips to help you create the right storage options, maximize your space and make your garage feel bigger than it ever has before.
10 tips to maximize space
- Build garage cabinets: Having a formal storage cabinet will help keep your garage organized. This clears up space and prevents items from lying around and getting lost, it also aids in keeping harmful materials/substances safe.
- Install wall organizers: Garages have plenty of wall space and you should definitely use it to your advantage! Install wall organizer units for tools and auto care products, while hanging larger items namely garden tools, even bicycles on hooks. Wall bins are perfect for sporting goods, kid’s toys or small garden equipment.
- Add overhead or ceiling storage: Use ceiling-mounted racks for additional overhead storage or lay down boards across the ceiling beams, this will double your storage potential. Ceiling storage is great for boxes, luggage, and less frequently used items.
- Get magnetic wall boards: Ideal for any steel or metal items lying around. Having small steel and metal parts magnetized to the board will keep them organized and prevent them from getting lost. Baby food jars are just as great for storing small parts in because they are clear, stackable and you can attach their metal lids to the underside of a shelf with hanging jars for easy access – just twist on and twist off.
- Go mobile with work areas: If your family uses the garage for crafting or as a workshop, then replacing the bulky old workshop table will definitely save space. Opt for those that are wall-mounted and can be folded after every use, or alternatively build a work area with wheels. Put wheels on as many stationary items as you can such as floor cabinets, tool chests and work benches. Items on wheels can be moved away from the walls to create temporary work areas, or even rolled outside for an afternoon and then easily rolled back into place when you’re done.
- Upgrade to adjustable shelving: Adjustable shelving lets you move your seasonal items namely clothes or decorations around in your storage boxes as needed. You can add on in the future and customize the configuration as your needs change. It is the simplest, least expensive garage storage solution. Install open wall shelves, place items inside large plastic containers that you can move around and put small shelving units in unused corners of your garage to make the most of your space.
- Install pegboards and hooks: Having a pegboard installed not only lets you hang and organize smaller tools that normally get consigned to a drawer or cupboard, but also allows you to keep larger items namely rakes, spades and other tools in place. You can go large or keep it small depending on your needs.
- Tie and keep wires in one place: If you have a ton of wires lying around this can add to a cluttered look. Tie up extension cords and wires lying around with cable ties; keep everything together in one drawer so you only have to search for a specific wire at a certain place.
- Lock down power tools: Power tools that are rarely used can be kept in your most inaccessible storage. Since these also tend to take the largest space in your garage, pack them away.
Don’t be afraid to use your creativity when thinking about your storage solutions and maximizing your garage space. Think of other ways or things that you can do to save up space and that fits with your style and preferences. Find what works for you and you will be happy with your newly decorated and clean garage.
If you are thinking of selling your home, then one of your biggest concerns will undoubtedly be to find out how much your property is worth. It is very important that sellers set the correct asking price when placing their home on the market as buyers, who are looking at properties to purchase are educated and know what they can buy within their price range.
“The price of your home will get influenced by what is happening on the political and economic stage of the country, the area as well as the surrounding suburbs. The condition and upkeep of your property, is one of the biggest factors which result in home owners losing money, when the opportunity for sale presents itself” informed Craig Hutchison, CEO of Engel & Völkers Southern Africa. Many sellers have inflated beliefs that their house is worth more than what they paid for the property, especially if they have had additional cost on improvements. It is essential that sellers view their home as objectively as possible.
It’s always best to consult a professional estate agent, who will be able to provide sellers with an estimated market value of their home by conducting a Comparative Market Analysis (CMA). They will base their evaluation on statistics and facts and remain objective. This analysis will incorporate the strength of the local market, demand and supply forces, and the sale of other similar properties in the local area. Agents have access to advanced industry developed tools to assist them with this process. The CMA will help to determine how much people are willing to pay for a particular type of property, and this will assist the seller in making an educated decision when it comes to their asking price.
Determining your property sales price in 4 simple steps
Step 1: Get informed
Understand what determines the market value of a home
Your property value will be determined on several different factors. While location is undoubtedly the most important, house prices will also depend on layout, condition, size, future developments, and desirable features. Details like a newly renovated kitchen or manicured lawn will add to your property’s value. Yet house prices are constantly shifting, which means that the property could be valued at a very different price today than what you originally paid for it, or even what it was worth one month ago. It’s essential to understand your property’s current market value in order to present buyers with a focused marketing strategy; otherwise you may run the risk of selling below value.
Step 2: Asks the experts
Obtain an expert valuation
While you can glean data from comparable recent property sales in your area, it’s highly recommended to obtain a professional valuation. The housing market changes daily, so it’s advisable to gain access to the latest sales trends in order to achieve a desirable house price. “At Engel & Völkers, our expert real estate agents have the most current, targeted sales data in each location at their fingertips. Our comprehensive, widespread sales network is able to provide local knowledge, ensuring that you’ll receive a realistic, accurate property value to work with” noted Craig.
Step 3: Do the math & plan
Use your valuation to set a realistic sales price
Your property value report is more than just a number. You can use this figure as a starting point for potential remodelling before putting the house on the market. There are a number of ways to boost your home’s market value, chief among them being a loft conversion which can add an average 12.5% to your selling price. In many cases, simple home repairs and a fresh, neutral slick of paint will create a small increase in value. Your agent can best advise you regarding how to proceed. Refer to the ROI on renovations guide for more in-depth information on which renovations are best to consider.
Step 4: Go to Market
Market your property with value in mind
Qualified real estate agents can optimise the marketing and sales process by using market value as a guide. When consulting our agents, you can choose from a classic sale with public marketing efforts used to secure maximum coverage, or a discrete sale where we market directly to prestige buyers. In either case, we use the market value of a home to craft premium printed materials as well as online advertisements, and reach out to the target buyer demographic at the ideal price point.
Are you ready to sell your property? Get in touch with a team of real estate experts and obtain a professional valuation for your home.
In the month of August we paid homage to the women of our nation and we celebrated the women in our communities. “We have celebrated all types of women this month and have acknowledged and still applaud the women of South Africa who take a stand, and who continue the fight against all the issues which seek to bring women down” says Tihara Baker, Relationship Manager of Engel & Völkers Southern Africa.
As our Women’s month draws to an end we have the privileged of speaking with Dane Van Niekerk, the right hand batter and Captain of the Momentum Proteas Women’s National Cricket team and gain some insight into her sporting career.
Dane’s journey started when she was just 4 year’s old playing cricket with her dad and brother in their backyard. She then started playing cricket as a sport and went through all the ranks in woman’s cricket: U/9, U/12, U/13 and U/15. She was spotted at the U/19 woman’s cricket where she then went to trials for the South African side and was later picked for the 2009 ODI Women’s World Cup in Australia and since she has not looked back and is living her dream.
What advice would you give to other women who wish to have a successful sporting career?
If you fall in love with any type of sport you must follow your dreams. Talent only takes you so far. You have to work hard. You don’t jump into any professional environment. You really have to work hard and train, but if you follow your dreams and if it’s something you really want to do then the opportunity in South Africa is there to pursue it, more so in cricket to be professional and do it as a job.
Do you have a role model? Who and why?
That’s difficult; if I have to look in cricket probably AB de Villiers at the moment. It was Shane Warne, but AB de Villiers is the best batter in the world and, you know, critics are getting him, but he just shows his class every time he goes onto the field and he never backs down from a challenge and he leads his team really well and that’s something I wish to do. He [AB de Villiers] has never been anything less than respectful to anyone that\s ever said anything to him so I think any person would strive to be, first of all, a person like that and a cricketer.
What is your motto in life? / What is your favourite famous quote?
“For with God, nothing shall be impossible”, we have a few players in the team that pray before a game and I believe in that and I guess I go about that before every game.
How do you conquer fears?
What is your outlook on investing in property?
Yeah, look, I think it’s important to invest. People like different things. I like property, because I like houses – it’s there and I can live in it. We’re actually in the market for a new house at the moment so I’m all for investing [in property].
Do you own any property?
Yes I do. A townhouse.
Where would your dream home be located?
Probably a beach house down the Garden Route. I would love anything by the beach so Knysna and those places.
Which room in your home is most important and why?
My room, because there’s a nice TV in there and it’s my bed. We don’t get to sleep there often so when we are there it’s probably the best room. And then the braai area (laughs).