Written for YourProperty
The question posed to our Property Poser panel this week is from a reader whose parents bought a property for her some 10 years ago.
As she was going through a divorce and had signed surety for some of her husband’s debts, the property was not registered in her name.
She wants to know how she can go about transferring the property – which was paid for in cash – into her name.
Based on the available facts, says Charlotte Vermaak from Chas Everitt in Port Elizabeth, we have to assume that the property was registered in the name of the reader’s parents.
“As ownership of property is regulated in terms of the registration thereof at the Deeds Office, her parents are the legal owners regardless of their intention to give it to her.”
Vermaak says for ownership to change at this point, either a sale or a donation has to take place. “From the facts it is clear that it was her parents’ intention to donate the property.”
A donation will have to be implemented based on its current market value, according to Vermaak. “Keep in mind that we are limited to donations to the value of R100 000 per year, after which donations tax of 20 percent is levied.”
Once the underlying transaction is determined, the normal transfer process has to be followed, says Vermaak. “A conveyancing attorney will be able to assist our reader.”
Such an attorney, says Justin Strömbeck from Du Toit Strömbeck Attorneys in PE, will be allowed to charge a prescribed fee that works on a sliding scale based on the value of the property.
“If the value of the property exceeds R500 000, transfer duty will also be applicable.” Strömbeck says this is a form of tax payable in respect of property transfers.
“Her parents may also face Capital Gains Tax issues if the property has increased in value since 2001.”
Strömbeck says the reader does not indicate why she wants to transfer the property now. “Another option is for her parents to bequeath the property to her in their will, which means ownership will only pass to her upon their death.
“Since there is no transfer duty payable in respect of a deceased estate, the transaction could be potentially cheaper. The other transfer costs are also paid by the estate.”
In the above event, says Strömbeck, there will also be no donation’s tax implications, but estate duty may be applicable depending on the value of the deceased estate.
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