Article by listed attorney: Fawzia Khan
Once you found the dream house you wanted and the selling price is within your budget, what are the steps required to get the house transferred into your name? Well the first thing would be to make an offer to purchase the property. If you found the property through an estate agent, he or she would have an in- house offer to purchase agreement which you could sign and which the agent would then take to the seller for acceptance. Once the seller accepts your offer, the sale agreement is regarded as being concluded. In order to have the house transferred into your name as owner, there is a fixed conveyancing process, which has to be adhered to before you can call yourself the owner of that dream house. The process to allow the purchaser to take ownership of immovable property into his name is done by a conveyancer. A conveyancer is a qualified attorney who is also admitted in the High Court to practice as such.
If the property is to be financed by an institution such as a bank, the lender bank will require a mortgage bond to be registered over the property. The registration of this mortgage bond is done at the Deeds Office and will be done at the same time when the property is being transferred into the new owner. If the seller had a bond on the property, that bond would also have to be cancelled at the Deeds Office. If the seller has a bond on the property, it’s important that he continue paying the monthly bond instalments until registration into the purchaser’s name. Once the property is transferred, the bank will refund to the seller any amounts, which were overpaid. If the seller’s bond was paid off, the bond itself would still have to be cancelled.
Often there are three different attorneys or conveyancers involved in the conveyancing process. The transferring attorneys, who would handle the actual transfer of the property, the bond registration attorneys who would be appointed by the bank to register the mortgage bond as well as the bond cancellation attorneys (who would cancel the seller’s existing bond).
Transfer duty has to be paid on purchase or acquisition of immovable property. It’s paid by the person or entity, which acquires the property and calculated on the amount of the purchase price. See rates table as set out below. A person will either pay transfer duty or Vat, never both. If the seller is a Vat vendor and the property is within his enterprise, then Vat will be payable. If the seller is not a Vat vendor, or the property does not fall within his enterprise, then no Vat will be levied, but transfer duty will be payable. Transfer duty to paid to the South African Revenue Services (SARS) and must be paid within six months of date of acquisition. Failure to pay transfer duty within that six-month period will result in SARS charging interest to the purchaser. Transfer duty applies to all persons (natural or legal) and includes Companies, Close Corporations and Trusts. There is no transfer duty payable up to R600 000,00. The person or entity which is acquiring the property pays the transfer duty .Transactions with suspensive conditions will not delay the liability to pay transfer duty.
The transfer rates applicable to transactions entered into after 23 February 2011 are:
• 0% on the value of property not exceeding R600 000;
• 3% on the value of property exceeding R600 000, but not exceeding R1 000 000;
• 5% on the value of property exceeding R1 000 000, but not exceeding R1 500 000; or
• 8% on the value of property exceeding R1500 000.
If SARS believes that the amount which the property is being acquired for is not a fair market value, it can request that independent valuers (such as an estate agent or sworn valuator) to submit valuations on the property, in writing.
Once the conveyancer has received the transfer duty receipt from SARS, as well as all the other documents such a rates clearance certificate from the municipality or levy clearance certificate from the body corporate or managing agent, as the case may be, as well as have all the transfer documents such as the new Deed drawn up, she or he will then be in a position to lodge the documents to the Deeds Office. The seat of the KwaZulu-Natal Deeds Registry is Pietermaritzburg. All conveyancers in KZN will send their documents to their Pietermaritzburg lodging conveyancing agents who would to go to the Deeds Office and get the property registered, and new mortgage bonds registered and old bonds cancelled, as the case may be. The South African laws on transfer and registration of immovable property is strict and full compliance is required, failing which the property will not be transferred. The offshoot of this is that in South Africa security of tenure is guaranteed and in this regard we surpass many other country’s transfer of immovable property laws including England.
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