FAQ

Most banks require at least a 10% deposit before they will grant you a mortgage bond. This all depends on your purchase price and may increase or decrease accordingly. If a deposit was a requirement in terms of the Offer to Purchase you signed, please ensure that these funds are immediately available for transfer to the Attorney on request.

-As the Purchaser you are liable to pay the legal costs to have the property registered in your name, both to the transferring AND bond attorneys. Please request for a quotation on these costs from your agent or Attorney prior to purchasing a property to assist you with planning and budgeting.

Bad debt, judgements taken against you or outstanding accounts all influence your bond application. Should this be the case you need to correct it before applying for your bond and behave for a few months before you can apply for a bond.

You are buying your dream property “voetstoots” which literally means exactly as it stands. You have a legal obligation to go through the entire property with a fine tooth comb: open and close the taps, cupboards and all doors. Also check for wall cracks, rising damp and the ceilings and walls for signs of a roof leak. Be sure to check the inside and the outside of the house carefully. You can also ask your estate agent to furnish you with the declaration the Seller has completed regarding all defects (both visible and invisible) in the property. If anything else bothers you, you can always employ the services of a company which specialises in inspecting the property on your behalf at your own cost. Stipulate any repair work which needs to be done meticulously and state when it needs to be done (safest is BEFORE registration takes place) and ensure that these are included in the Offer to Purchase.

It is also advisable to inspect the property’s title deed to ensure that there are no onerous conditions or servitudes on you, as the new owner.

The seller is legally obliged to furnish you with approved building plans for all additions to the property. Please ensure that you peruse them even before you sign the offer to purchase. Structures which are not included in the house plans should be included by the seller and an updated house plan should be provided.

If the property you have chosen is situated in a sectional title complex or in an estate you should ask your seller to provide you with a copy of the Body Corporate or the Home Owner’s Association’s rules. Peruse them carefully and make sure that you are happy with them before you sign the offer to purchase to prevent any nasty surprises. It would also be wise to peruse their financials to ensure that they are solvent.

Put as much of the negotiations as possible into writing and ensure that the offer accurately reflects your intentions. All fittings you wish to remain in place must be specifically stipulated – as well as anything you want repaired or done prior to the transfer taking place. Also put a time limit on every stipulation to ensure that it is enforceable. This makes the future conveyancing to take place effortless and pain free and will prevent a lot of hassles for you.

It is better to take occupation of the property only once it is registered in the Deeds Office. In any case, if you occupy any sooner, you will have to pay occupational rent to your seller instead of paying your own bond! In our experience delaying the occupation date until registration prevents a myriad of problems which can occur if the sale goes sour!

The seller needs to furnish you with a valid electrical, gas and electrical fence compliance certificates (if applicable) at his cost. Some of the banks require these certificates before they would allow their bond to be registered. Best to ensure that the seller hands them to you as soon as your bond is approved.

Your Will is probably the most important document you’ll ever sign. A Will, which is more commonly known as a Last Will and Testament, is a legal document that stipulates how and to whom your assets (for example your fixed property, cars, jewellery, investments etc.), should be distributed when you die

The principle of freedom of testation is one of the cornerstones of the law of succession in South Africa. This principle allows the Testator or Testatrix to distribute their assets to whomever they wish. There are, however, laws that determine how a deceased Estate is administered (distributed) when someone dies intestate, which is without a Will. When you have a valid Will, you provide guidance on how your Estate should be administered.

A Last Will and Testament generally includes:

• Who your Beneficiaries, Heirs and Legatees are: Your Will stipulates who will benefit from your Estate and what portion of your Estate you bequeath (give) to them.
• Whether a Testamentary Trust should be created for your minor children (known as Beneficiaries).
• Who the Trustees should be if you do require a trust be set up.
• Who the Guardians of your minor children should be.
• Who the Executor of your Estate should be.
• Your last wishes: Such as whether you want to be buried, be an organ donor, etc

If you do not have a legal, valid Will the laws of the State will govern how your assets are distributed. These include Maintenance of Surviving Spouses Act, Intestate Succession Act and/or the Children’s Act. The Executor of your Estate will ensure that your Estate is divided as per the Intestate Succession Act with consideration of the Maintenance of Surviving Spouses Act and Children’s Act, upon which your Estate will be divided per stirpes and by representation.

This may not be desirable as your assets will not necessarily be distributed according to your wishes however instead they will be distributed according to Intestate Succession Act.

Trusts and Wills and two completely different things.

A Will is a document that contains your final wishes on how you want your estate to be distributed when you pass away.

A trust, on the other hand, is a legal structure established to transfer property and assets to beneficiaries. A trust requires continuous management by Trustees.

Testamentary trusts are trusts you create through your Will and when set up correctly, they provide financial provision, safeguarding of assets and certainty for beneficiaries until the beneficiaries are able to manage their inheritances effectively on their own. In the case of minors and individuals who are unable to manage their own finances, if there is no trust in place, their inheritances are paid to the Government Guardian’s Fund.

This is difficult to specify as every Estate differs depending on the challenges unique to the Estate.

Our business rule is to try and finalise an Estate within twelve (12) months. Although we do achieve this sooner in some instances, we need to regulate expectations and state that Estates with many challenges may take longer to finalise. In some cases, an Estate cannot be reported to the Master of the High Court due to factors such as missing/unsigned documents and cause of death. If this is the case, the Master of the High Court will not issue a Letter of Executorship (LoE) or Letter of Authority (LoA). The Estate cannot be administered until an LoE/LoA is issued.

Yes, if the deceased has any assets (at least R 1000) which need to be administered then as per the Administration of Estates Act 66 of 1965, an Estate Late bank account will need to be opened to be administered by the Executor.

Yes. The Executor of an Estate is responsible for lodging the tax returns for both the deceased individual, as at the time of their death, and for the Estate, from date of death to when the Estate is finalised.

The Executor of the Estate has an obligation to make sure that all tax returns of the deceased are up to date with the South African Revenue Services (SARS).

NB: If the deceased was a pensioner at the time of death or even a few years prior to date of death, the tax returns have to still be completed and submitted to SARS in order for SARS to advise the Executor that the taxes are in order and will provide the Executor with a Tax Compliance Certificate for the Estate (TCC).

No, where the registered owner of immoveable property has died, their property/house will need to be transferred to another person, usually a family member. Assets in the name of the deceased will have to be transferred to the heirs of the Estate to be able to close off an estate and obtain the filing slip from the Master of the High Court, according to the deceased Administration Act.

Trusts and Wills and two completely different things.

A Will is a document that contains your final wishes on how you want your estate to be distributed when you pass away.

A trust, on the other hand, is a legal structure established to transfer property and assets to beneficiaries. A trust requires continuous management by Trustees.

Testamentary trusts are trusts you create through your Will and when set up correctly, they provide financial provision, safeguarding of assets and certainty for beneficiaries until the beneficiaries are able to manage their inheritances effectively on their own. In the case of minors and individuals who are unable to manage their own finances, if there is no trust in place, their inheritances are paid to the Government Guardian’s Fund.

Trusts and Wills and two completely different things.

A Will is a document that contains your final wishes on how you want your estate to be distributed when you pass away.

A trust, on the other hand, is a legal structure established to transfer property and assets to beneficiaries. A trust requires continuous management by Trustees.

Testamentary trusts are trusts you create through your Will and when set up correctly, they provide financial provision, safeguarding of assets and certainty for beneficiaries until the beneficiaries are able to manage their inheritances effectively on their own. In the case of minors and individuals who are unable to manage their own finances, if there is no trust in place, their inheritances are paid to the Government Guardian’s Fund.

Trusts and Wills and two completely different things.

A Will is a document that contains your final wishes on how you want your estate to be distributed when you pass away.

A trust, on the other hand, is a legal structure established to transfer property and assets to beneficiaries. A trust requires continuous management by Trustees.

Testamentary trusts are trusts you create through your Will and when set up correctly, they provide financial provision, safeguarding of assets and certainty for beneficiaries until the beneficiaries are able to manage their inheritances effectively on their own. In the case of minors and individuals who are unable to manage their own finances, if there is no trust in place, their inheritances are paid to the Government Guardian’s Fund.

When someone passes away it is important to remember that there are four types of taxes that come into play when dealing with the Estate: 1.) Income Tax for the deceased individual (Personal Taxes); 2.) Capital Gains Tax; 3.) Estate Duty Tax; and 4.) Donations Tax (if applicable to the specific Estate).

Income Tax (Personal Taxes)

• The Executor in the Estate has a duty to make sure that all tax returns of the deceased are up to date with the South African Revenue Services (SARS).
• If any tax years are outstanding the Executor will then have to request the relevant tax certificates/IRP5s from the respective institutions and then send it onto the tax practitioner to have them submitted and uploaded at SARS.
• The Estate will be charged Income Tax on any and all income, whether it is for dividends received, rental income or interest accrued during the Estate Administration process.
• There are two types of assessments that must be carried out: firstly, a pre-date assessment (all income and deductions that were applicable to the deceased up to their date of death); and secondly, a post-date of death assessment (all income and deductions in the Estate from after date of death).
• NB: If the deceased was a pensioner at the time of death or even a few years prior to date of death, the tax returns should still be completed and submitted to SARS in order for SARS to advise the Executor that the taxes are in order and therefore provide the Executor with a Tax Compliance Certificate (TCC) for the Estate

Capital Gains Tax

• When someone passes away, the deceased individual is deemed to have disposed of their assets. This is because there has been a “change of ownership” as the assets will now be inherited by the heir/s in the Estate.
• This deemed “change of ownership” attracts Capital Gains Tax for the Estate and is payable to SARS.
• If the Executor of the Estate sells property or receives property into the Estate then these assets will attract Capital Gains Tax.
• However, it is important to note that certain assets in a deceased Estate are excluded from Capital Gains Tax. These include: assets for personal use (there are certain exceptions); assets inherited by the surviving spouse; the proceeds from life assurance policies; and interests in pension, provident or retirement annuity funds.
• At death there is a once-off exclusion of R300 000 which means that R300 000 of the gain or loss will not attract any tax on capital gains made.
• Any amount over and above R300 000 will have an inclusion rate of 40% and this amount will then attract the applicable tax as per the deceased individual’s marginal rate.

Estate Duty

• Estate Duty is determined based on the gross value of the Estate.
• Each individual is granted a rebate of R3.5 million and Estate Duty is therefore only taxed on the value of the Estate over R3.5 million.
• Estate Duty is levied at 20% on the first R30 million and then 25% on the value above R30 million.
• In terms of Section 4(q) of the Estate Duty Act – the Estate Duty liability in respect of the assets inherited by the surviving spouse is postponed. This means that it is deemed that the deceased individual disposed of the assets on the day of his/her death but the liability for the tax is postponed until the death of the surviving spouse.

Donations Tax

• Donations Tax does not form part of the calculation of an individual’s Income Tax liability and the Donations Tax calculation is done separately on each occasion that a donation is made.
• Donations Tax is not levied on an individual’s income but on the capital transferred which is usually in the form of assets.
• There are two parties involved in a donation, i.e. the donor (the person who makes the donation) and the donee (the person who received the donation).
• The donor is liable for the payment of the donations tax. If the donor fails to pay his tax within the prescribed period (normally by the end of the month following the month in which the donation took effect or for a period as the Commissioner may allow,) the donor and the donee are jointly and severally liable for the Donations Tax.
• Donations (taking into account certain exemptions as discussed below) are subject to donations tax levied at a rate of 20% on the value of the donation and applicable to donations made on or after 1 October 2001.

The following donations are exempt from Donations Tax:

• Donations between spouses.
• Donations that are made and materialise only when the donor dies. For example, if a person has a life-threatening job.
• Donations which the donee will only receive the benefit of upon the death of the donor.
• Donations that are cancelled within six months of taking effect.
• Traditional councils, traditional communities and certain tribes.
• Property located outside the Republic of South Africa.
• Exempt organisations such as: government; provincial administrations; municipalities; etc.

All Executors’ fees are regulated by a set tariff of 3.5% excluding VAT on the gross value of assets and 6% excluding VAT on all income received into the Estate during the administration process. Additional charges include costs of advertisements to made in terms of Section 29 and Section 35 of the Administration of Estates Act as well as the costs of attending to a transfer of property in the estate.