This department specialises in the transfer of property, sectional titles scheme registration and opening of town registers etc.
WHAT IS TRANSFER DUTY?
Transfer duty is another source of income for the government where property is sold. The amount that must be paid is calculated according to what the government stipulates from time to time during its budget presentations.
HOW IS TRANSFER DUTY CALCULATED?
Transfer duty is calculated on a tariff basis and is directly relating to the purchase price of the property. The government in its recent budget presentation has indicated that the transfer duty of an individual and that of a juristic entity is the same, wherein the past a juristic persons was taxed at a higher bracket.
Currently both Natural as well as Juristic persons are taxed as follows:
|Value of property (R)
|0 – 900 000
|900 001 – 1 250 000
||3% of the value above R900 000
|1 250 001 – 1 750 000
||R10 500 + 6% of the value above R1 250 000
|1 750 001 – 2 250 000
||R40 500 + 8% of the value above R1 750 000
|2 250 001 – 10 000 000
||R80 500 + 11% of the value above R2 250 000
|10 000 001 and above
||R933 000 + 13% of the value above R10 000 000
For Example: Purchase price = R 800 000.00 R 800 000,00-R 500 000,00 = R 300 000,00* 5% = R 15 000,00 transfer duty payable. If the purchase price is > R1 000 000,00 then 8% is payable plus R 25 000,00 (R25 000,00 is calculated for the amount between R 500 000,00 and R1 000 000,00)
Example: Purchase price = R 1 700 000,00 a buyer will be liable for transfer duties calculated as follows:
Frist R 600 000.00 = 0
Next R 400 000.00 at 3% = R 12 000.00
Following R 500 000.00 at 5% = R 25 000.00
Balance of R 200 000.00 at 8% = R 16 000.00
Thus a total of R 53 000.00 transfer duty is due and payable on a purchase price of R 1 700 000.00.
WHAT IS PAYABLE IN A TRANSACTION?
The conveyancer is guided by the law society rules and in general, is it only a guide for a conveyancer to calculate transfer and bond fees. The fee for transferring or bonding a property increases as the purchase amount increases. A pro-forma invoice, relating to a transfer, may displays the following amounts which are payable: Transfer duty; Transfer fee for the conveyancer; Postage and petties; Deeds office fee; Clearance certificate on erf (Sectional title a fee is payable to obtain the certificate from the Body Corporate) Fica fees; Pro rata rates and taxes payable in advance.
A pro-forma invoice, relating to a bond registration, may displays the following amounts which are payable Bond fee; Postage and petties Deeds office fee; Valuation fee (A fee charged by the bank for valuation of the property); Initiation fee (A fee charged by the bank for granting the loan).
HOW LONG WILL A TRANSFER AND BOND REGISTRATION TAKE?
Registration in general may take a minimum of eight to ten weeks and on average will take between twelve and fifteen weeks.
If a bond is registered over the property, same has to be cancelled. In such instance, cancellation figures are requested from the relevant bondholder.
A clearance certificate from the council is also required and has to be lodged with the transfer documents. The issuing of the Clearance Certificate may take approximately three to twenty one days and is entirely depended on the procedures of each council. Normally the city council requires a prepayment before the certificate is issued, and any excess payments made by either the Purchaser or Seller will be refunded by the city council at a later stage.
Lastly a transfer duty receipt is also a prerequisite when the documents are lodged at the deeds office. The transfer duty receipt is issued by SARS upon payment of the prescribed transfer duty.
WHAT DOCUMENTS WILL BE LODGED FOR A TRANSFER, BOND CANCELLATION & BOND?
Transfer: Power of attorney (Authorization by the Seller to attend to the transfer of the property); Concept deed; Clearance certificate for a erf (Sectional title a clearance certificate from the body corporate); Transfer duty receipt.
Cancellation of bond: Cancellation document from the bondholder confirming that the bond may be cancelled; Title deed (Original); Bond deed (original).
Bond: Bond documents.
WHAT IS THE DIFFERENCE BETWEEN SECTIONAL TITLE, SHARE BLOCK AND TIME SHARE?
A Sectional Title is where only a section of the property is registered in the name of an owner, whilst the remainder consist of common property or exclusive use, which is jointly owned by all the owners.. Typical examples of Sectional Title Units are town house complexes or flats. The units may be joint or may be alone standing.
Share block – is where a person will purchase shares in a Company, which is the sole owner, and is entitled to an exclusive right to occupy a part of a building owned by that Company.
Time share – is where property or building or a portion thereof will be occupied periodically or for a specific time of the year by the Purchaser. He therefore only shares in the property and may occupy same during his allotted time periods.
WHAT OTHER RIGHTS CAN BE REGISTERED IN THE DEEDS OFFICE?
Mineral rights (for excavating minerals gold,any minerals etc); Leases for immovable properties which must be registered notarially (only certain circumstances please contact us for further enquiries); Personal (usus, habitatio, usufructus) and Praedial Servitudes (Right of way); Mortgage bonds (First and second bonds etc. Notarial bonds-passed for security over immovable property Rights to develop-large scale housing (This is usually RDP housing).