THE PROFESSIONAL SERVICE

Dealing with all your conveyancing and Mortgage Bond requirements effectively and efficiently.

strb Smith Tabata Buchanan Boyes have a team of highly specialised Public Relations Officers, who collectively have over 100 years of financial experience, to assist you and your clients with professional service.

CHOOSING A CONVEYANCING ATTORNEY

strb Smith Tabata Buchanan Boyes have over 10 branches within South Africa and take pride in in providing a truly professional service.

• Our commitment to you is to get the job done in as short a time as possible.
• Our attorneys have extensive knowledge of the property market and in-depth experience of the conveyancing process within South Africa
• Whether you are an individual Purchaser, Seller or Developer of property, we have tailored services to meet your needs
• We offer a 24 hour property "Hot Line" service to all existing and future clientele. All of our Attorneys can be contacted via their mobile phones.
• We offer on-line website reporting to individual, corporation or company to view detailed progress of their transactions.

Purchasing Property in South Africa as a Foreigner
We are fully geared to advise you on all the latest laws and acts governing the purchase of property as a foreigner. Our offices are completely electronic and dealing this way has become second nature, distance has become the norm not an anomaly.

TIPS FOR PURCHASING PROPERTY

The term Immovable Property includes amongst others:

• vacant erf or erven;
• houses;
• flats and townhouses forming part of a sectional title scheme in terms of the Sectional Titles Act 95 of 1986;
• houses forming part of a group housing scheme;
• flats and townhouses forming part of a share block scheme in terms of the Share Blocks Control Act 59 of 1980; and
• accommodation in a housing development scheme as defined in the Housing Development Schemes for Retired Persons Act 65 of 1988.
• Ensure that you deal with a reputable Estate Agent
• The Financial Intelligence Centre Act (FICA), which has recently been promulgated, calls for all persons entering into financial transactions to disclose all their personal particulars.
• Prior to signing an Offer to Purchase where there are clauses in the contract that you do not understand, please refer to an Attorney for legal advice.
• In all property transactions the following costs are usually paid for by the Purchaser of the property: Conveyancing Fees which include Transfer Duty, Transfer Fees, Deeds Office Levies, Stamp Duty (if applicable), Pro-Rata Rates and Taxes, Rates Clearance Certificate Costs.
• Coupled to the above, should a Mortgage Bond be required, the Bank will charge the Purchaser (Mortgagor) the following costs: Initiation Fee, Valuation Fee, Administration Fee and the Attorney will charge a fee to register a Mortgage Bond.
• The Seller of the property is liable for the following costs unless another arrangement is made: Estate Agents Commission, Entomologist Certificate, Electrical Compliance Certificate, Cancellation Fees for any bonds registered over the property.
• Usually the Seller of the property nominates the Conveyancing Attorney.

MORTGAGE BONDS

• A Mortgage Bond is an agreement in terms whereof a Mortgagor (Purchaser) borrows money from the Mortgagee (Bondholder) and agrees to pass a Mortgage Bond over specific immovable property in favour of the Mortgagee as security for the repayment of the money.
• The Mortgagor then repays the Capital amount plus interest back to the Mortgagee in terms of the loan agreement.
• In most cases the Mortgagee is a Bank or Financial Institution. The Mortgage Bond is registered in the Deeds Office against the Title Deed and a Conveyancing Attorney must be appointed to deal with the registration of the Mortgage Bond in the Deeds Office.

THE COST RELATING TO THE TRANSFER/ PURCHASE OF A FIXED PROPERTY

TANSFER DUTY 

Where Transfer Duty is payable, a formula is applicable based on the value of the property. Transfer Duty normally constitutes the majority of the costs and is usually payable by the Purchaser to the South African Revenue Services.

Where the Purchaser is a natural person, Transfer Duty is charged on a sliding scale while an entity other than a natural person pays Transfer Duty at a flat rate of 10% of the purchase price. When a company is the owner of immovable property, a sale of its shares will attract stamp duty. There is no stamp duty on the sale of a member’s interest in a corporation.

VAT 

No Transfer Duty is payable if the Seller is registered as a VAT vendor on the date of registration, in which event the Seller is liable to make payment of the VAT, charged at 14%, to the Receiver. The VAT is deemed to be included in the purchase price, unless specified to the contrary in the agreement. In the latter event the Purchaser will have to pay the VAT in addition to the purchase price.

RATES AND TAXES

Whilst not a cost of transfer, rates and levies must be paid in full on the date of transfer. A pro rata (normally to date of possession) portion of the charges is payable by the seller on fixed property to the relevant local authority or the levies payable to the Body Corporate in the case of a sectional title unit. The Purchaser will be liable for the pro rata rates or levies as the case may be, after possession until transfer.

FEES 

The Conveyancer's fees are prescribed by a tariff and are calculated on a sliding scale based on the purchase price. The Purchaser is usually liable for payment thereof together with VAT thereon.

THE CONVEYANCING PROCESS 

“CONVEYANCING” describes the legal process whereby a person, company, close corporation or trust becomes the registered and lawful owner of fixed property and ensures that such ownership cannot be challenged. It also encompasses the process of the registration of Mortgage Bonds.

Conveyancer is an attorney who by law is the only person who can register fixed property transfers. This is necessary to ensure the protection of the various interests the parties have in the transaction and to maintain the high standard applicable to land registration.

The first requirement is a valid Agreement of Sale. This is a written agreement which is signed by both the Purchaser and the Seller (and by the Seller’s spouse in cases where the parties are married in community of property, or account to the laws of a foreign country).

A written “Offer to Purchase” signed by a Purchaser and accepted by a Seller also constitutes a binding agreement. An oral contract for the sale of fixed property is invalid.

The Agreement of Sale/Offer to Purchase is handed to the appointed Conveyancer, who will draft the necessary documents. Both the Seller and the Purchaser will be required to call at the offices of the Conveyancer to sign the necessary documents.

BOND REGISTRATION COSTS

The Conveyancer's fees are calculated on a sliding scale based on the amount of the bond and are payable by the Purchaser to the Conveyancer who registers the bond.

BOND CANCELLATION COSTS

If the Seller has a bond registered over the property, this must be cancelled on transfer and the Seller is responsible for payment of the Conveyancer's fees for attending to the cancellation.

CAPITAL GAINS TAX (CGT)

Capital Gains Tax is a tax payable on the profit a Seller makes when a property is disposed of, and not on the entire value of the property.

The Profit (Capital Gain) is calculated by deducting the base cost of the property from the proceeds on disposal of the property. Disposal includes sale, donation, exchange or vesting the property in the name of a beneficiary of a trust.

The amount of CGT payable depends entirely on the entity that owns the property.

Non-Residents are also liable for the payment of CGT.

Please Note: This very short introduction to Capital Gains Tax does not purport to contain a complete summary of the Capital Gains Tax Provisions. Please contact our offices for more details.

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