Property Law

Property Law Services

Nielen Marais Inc. offers a turnkey solution for all aspects relating to property law.

Our property law services include:
  • Transfer of conventional title & sectional title property
  • Rezoning of properties for commercial, residential or sectional title development
  • Sub-division of property
  • Consolidation of properties
  • Opening of township registers
  • Registration of personal & praedial servitudes and other real rights
  • Opening of sectional title registers
  • Registration and cancellation of mortgage & notarial bonds
  • Drafting of deeds of sale for the sale of residential, industrial and commercial property
  • Drafting of General Power of Attorney
The firm also provides advice regarding the relevant tax and fiscal laws and the influences thereof on property transactions (i.e. Capital Gains Tax, Transfer Duty, Value Added Tax).

Capital Gains Tax (CGT)

When immovable property is disposed of, the seller becomes liable for the payment of Capital Gains Tax on any profit made in respect of that property after 1 October 2001, which is the date on which this tax was first introduced in South Africa.

The first R2 million of any profit made on the sale of a property by an individual is exempt from CGT, provided the property in question constitutes the individual’s primary residence. This applies to South African residents only. If the property is owned by an individual or a special trust, 33.3% of the capital gain made on disposal of the property must be included in their taxable income for the year of assessment in which the property is sold. The present maximum marginal rate of income tax for individuals is 40% and therefore individuals will pay a maximum of 13.3% of the capital gain. This is the lowest rate of CGT payable.

If a property is owned by a company, close corporation or normal trust, 66% of the capital gain must be included in its taxable income. Close corporations and companies pay income tax at a flat rate of 28% resulting in these entities therefore having to pay 18.6% of the capital gain in tax. Trusts attract the highest rate of Capital Gains Tax: 66.6% of all profits gained on the sale of trust assets are included in the trust’s taxable income and taxed at the rate of 40% (statutory rate), resulting in a nett Capital Gains Tax cost of 26.6% (effective rate) of the capital gain. If a capital loss is made on disposal of the property, it may be offset against any capital gains made in that year of assessment and, if no capital gains have been made, the loss may be carried forward to subsequent years of assessment.

For individuals in the 2013 / 2014 financial year, the first R30 000 of their capital gain or loss in any year of assessment will be exempt and thus disregarded. This figure increases to R300 000 in the year in which an individual dies.

Transfer Duty

Transfer Duty is a tax payable to the South African Revenue Service and is levied according to the Transfer Duty Act, 1949 (Act No. 40 of 1949) on the value of any property which is acquired by way of a transaction or otherwise.

Transfer Duty is also payable on the transfer of a member’s interest in a close corporation o

The following Transfer Duty rates are applicable to property acquired on or after 23 February 2011, and apply to all persons (including Companies, Close Corporations (CC) and Trusts).

Value Added Tax (VAT)

No Transfer Duty is payable if the transaction attracts VAT. If VAT is payable, the seller is liable to pay VAT over to SARS. It is imperative that the Deed of Sale clearly indicates whether the purchase price includes or excludes VAT. If the property is being sold as part of a going concern and both the seller and purchaser are VAT registered, then the transaction will be “zero-rated” for VAT purposes and no VAT will be payable by the seller or purchaser. The Deed of Sale must then stipulate that the property is being sold as part of a going concern and must in fact be a VAT generating concern.