Benjamin Franklin said that there are only two things certain in life: death and taxes. This statement goes far into a property transaction.
When transferring a property into the name/s of the purchaser, one of the documents which needs to be lodged in the deeds office is a transfer duty receipt or a transfer duty exemption certificate.
When the conveyancer applies for the transfer duty certificate, the Receiver of Revenue will now do a risk analysis regarding outstanding taxes on both the seller and the purchaser.
If there are any taxes outstanding by either of the parties, the Receiver will not issue the relevant transfer duty receipt until the taxes have been paid or an arrangement for payment has been made.
The Receiver will accept an undertaking in certain circumstances from the conveyancing firm concerned that the taxes will be paid on the date of registration of the transfer.
Any person whose income tax is not up to date will not be able to purchase or sell property until the same has been resolved.
This can result in a delay of approximately five working days in the issuing of the transfer duty receipts.
The Receiver of Revenue, in addition to the above, also require certain information with regards to the estate agent/agency involved in the transfer transaction before issuing a transfer duty receipt.
The information referred to includes among other, the amount of commission payable to the agent/agency, and the agent’s/agency’s VAT registration number if registered.
According to the Receiver, the relevant information will be utilised to determine whether certain agents/agencies are evading the payment of or registration for VAT on commission earned.
For any property related questions, kindly direct them to conveyancing@sjbothaattorneys.co.za
