June 8, 2022

Transfer duty. No surprises. Part I

Transfer duty is a duty levied for the benefit of the National Revenue Fund on the value of any property acquired by any person by way of a transaction or in any other way, or on the amount by which the value of any property is enhanced by the renunciation of an interest or restriction upon the use or a disposal of that property. The value of the duty is determined by the Minister of Finance and is based on a sliding scale relative to the value of the property. Property is defined in the Act to mean land in […]
December 9, 2021

The ups and downs of property co-ownership

Property ownership is no small feat. It is one of the most reliable forms of investment and one of the biggest items that most people have on their financial “to-do” lists. Unfortunately, it is not always an easily achievable goal. Property ownership has always been a costly endeavour, and in recent years the age of first-time homeowners has been steadily increasing as younger professionals find their financial footing later than in previous years, making the one option that helps property buyers side-step the financial burden is co-ownership. But how beneficial is this path really? Co-ownership is when one or more […]
November 15, 2021

Preparing your budget for your dream home

Purchasing a new home is undoubtedly an exciting decision, but it is also an extremely emotional one. A home is where family traditions are brought to life and where lifelong memories are made. However, in addition to the immense pride that comes with having a place to call your own, comes the heavy costs that tend to come along with purchasing your new place, which you may not even be aware of. When purchasing property, it is important to look beyond just the purchase price – there are a number of other costs that should be included into your budget […]
August 13, 2021

Understand your tax liability when selling a residence

The Eighth Schedule of the Income Tax Act, which deals with capital gain tax, allows for exclusion from liability on any gains realised on the sale by a taxpayer of a primary residence on the first R2 million of such gains. There are, however, several more complex matters that often arise in the determination of any gain, and we examine some of those in more detail below. How often do you qualify? There is no limit on the number of times a person can qualify for the exclusion of R2 million, even during the same year of assessment. It applies each time a primary residence is disposed of, and there is no […]
December 11, 2020

Emigrating while retaining your property?

The exodus of South Africans to foreign jurisdictions has been well publicised, and due to this, much has been written about the so-called “exit tax” that applies when one ceases to be a tax resident in South Africa, as well as matters relating to foreign employment income earned. However, what is often overlooked is what happens when you emigrate but retain your home in South Africa. The general principle is that when you cease to be a South African tax resident, your home (constituting immovable property in South Africa) will not be subject to the “exit charge”, since that immovable property always remains a […]
August 10, 2017

PROVISIONAL TAX WHEN YOU SELL YOUR PROPERTY

The pregime operates as a continuous cash flow mechanism in favour of Government whereby tax on income earned is paid over provisionally in anticipation of the final tax liability to be calculated when a person is finally assessed to income tax. Where a person is required to be registered for provisional tax, estimates of taxable income are required to be submitted to SARS bi-annually (and provisional taxes paid accordingly), being after the first 6 months of the start of the person’s tax year, and again on the last day of that tax year. Quite a number of our clients are […]
June 2, 2017

WITHHOLDING TAX ON PROPERTY SOLD BY NON-RESIDENTS

A remarkable number of non-residents own property in South Africa. While non-residents are not subject to South African capital gains tax generally, an exception is to be found where non-residents dispose of South African immovable property, or shares in “South African property rich” companies.A obvious practical difficulty arises though for SARS to collect taxes from non-residents once they have sold their properties and have no further connection with South Africa. There is very little SARS can do to collect a tax debt from such non-residents, let alone compel them to file the necessary tax returns. Section 35A of the Income […]
June 7, 2016

A NEW TWIST IN THE QUESTION: IS THE BUYER OF AN IMMOVABLE PROPERTY RESPONSIBLE FOR PAYING THE SELLER’S OUTSTANDING MUNICIPAL ACCOUNT?

Municipalities are required to issue rates clearance certificates without which a property cannot be transferred from a seller to a buyer. The rates clearance certificate certifies that outstanding debts owing to a municipality up to the date of transfer have been settled. Property buyers relied on these certificates as proof that all previous debt on the property have been fully settled and that transfer of the property to the buyer could proceed. However, in some cases rates clearance certificates are issued while all charges for the period before the transfer date of a property to a new owner are not […]
March 18, 2014

Co-ownership of land

The word “co-ownership” in relation to land means that two or more persons own land simultaneously in undivided shares. A share in land does not represent, and may not be held to represent a defined portion of land. A co-owner who holds a share in land does not hold title to a defined piece of land even if by arrangement with his co-owners they might have agreed to give him occupation of a specific portion of land.  The title he has is to an undivided share only, in the whole of the land, held in joint ownership.  The portion he […]
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