BUDGET HIGHLIGHTS 2022/2023
Personal Income tax
Personal Income tax
Immovable Property Subject To CGT
* For tax years ending on or after 31 March 2023 the tax rate is reduced to 27%.
Please note that the information contained in this section is not exhaustive and serves as a brief overview of the Consumer Protection Act (68 of 2008), hereinafter referred to as the CPA, as it specifically relates to property related transactions. There are still many ambiguities and uncertainties surrounding some of the provisions of the Act which only time (and the courts) will be able to interpret and clarify. You are strongly advised to contact our offices for further advice or consultation on this topic.
TYPICAL COSTS OF BUYING
When a person, who owns immovable property registered in his name at the date of his death, passes away, a number of scenarios may arise, as follows:
A written agreement must be drafted and signed. A verbal sale agreement in respect of immovable property is unenforceable and void in South Africa. The following are some important clauses to be borne in mind:
Donations Tax is payable by any South African resident. The donations tax provisions do not apply to non-residents even if they donate South African assets. Donations tax is payable on the value of any gratuitous disposal of property (including the disposal of property for inadequate consideration) and the renunciation of rights.
The Electronic Deeds Registration Systems Act (19 of 2019), was signed into law on the 19 September 2019, and published in the Government Gazette on 3 October 2019, and will come into operation on a date fixed by the President by proclamation in the Gazette (who may set different dates for the coming into operation of any or certain provisions of this Act for the different deeds registries). The Act aims to facilitate the development of an Electronic Deeds Registration System, known as e-DRS – which will enable the electronic processing, preparation, lodgement and registration of deeds and documents by conveyancers and the Registrar of Deeds over the internet.
The general rule is that if the taxpayer is ordinarily resident in the Republic at the time of death, all of his assets (including deemed property), wherever they are situated, will be included in the gross value of his estate for the determination of duty payable thereon. Estate duty is levied at 20% on the first R30 million of the dutiable estate. Estate duty will be levied at 25% on the dutiable estate in excess of R30 million. Estate duty is levied on the South African property of non-residents. Deemed property includes insurance policies on the life of the deceased, claims in terms of the matrimonial property act as well as property that the deceased was competent to dispose of immediately prior to his death.
ACQUISITION OF FIXED PROPERTY BY NON-RESIDENTS
A general “force majeure” (or “act of God”) clause is often included in lease agreements, and in most cases, its definition is termed broadly. Such a clause will only apply in circumstances which are beyond the parties’ control, which human foresight could not have anticipated, and which make performance in terms of the contract objectively impossible.
HOME LOAN AND MORTGAGE DISCLOSURE ACT (63 OF 2000)
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