Why hasn’t my property transfer gone through?

If you’re buying or selling a property, here’s something you may not have thought of: are your taxes up to date? If they’re not, you can delay the transaction and even lose the sale – and on top of that, be liable for the agent’s commission.

According to Billy Joubert, tax director at Deloitte, you need a South African Revenue Service (Sars) declaration stating that transfer duty has been paid. If Sars withholds this declaration because you’re not up to date with your tax, transfer simply won’t take place. To avoid delays and inconvenience, estate agents are now putting a clause into their agreements stating that both parties’ tax affairs must be in order. The consequences of not being up to date might include being liable for the commission, even though the sale doesn’t go through.

Something else you need to consider if you’re selling is that you’re responsible for making sure municipal rates are up to date so you can obtain a rates clearance certificate. In practice, municipalities require an advance payment of five months’ worth of rates plus the estimated value of services, such as water and electricity, before issuing a rates clearance certificate.

You can apply for a refund of the relevant portion of this advance payment once transfer’s gone through. But sellers obviously need to budget for this advance payment, since it’s required before transfer can go through (and therefore before they’ve received payment for the house from the buyer).

 

 

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