Tax is not paid on houses inherited through deceased estate

Lanice Steward, MD of Anne Porter Knight Frank, the Cape Peninsula estate agency that recently spread its wings to take in Hout Bay and Camps Bay, has drawn attention to a statement from the attorneys and conveyancers, STBB (Smith Tabata Buchanan Boyes), which makes it clear that those inheriting property from a deceased estate will not be required to pay transfer duty on it, provided the bequeather has already done so.

“The law regarding the transfer duty payable on successive ownership was tightened up some time ago to ensure that all who take over a property pay the tax, even if they hold it for a short time,” said Steward. “This was necessary because in the boom period of 2003 to 2005 some buyers were signing for a property, then using a nomination clause to on-sell at a profit before taking transfer, i.e. never actually become the legal owners.

“This,” she said, “means that SARS received a duty payment on one transfer, even though in practice there had been two.”

In a deceased estate, said Steward, it is now possible for the heirs to nominate one person to take over the property or properties and to arrange, if this is the plan, to be paid out for their share, or take no payment, either permanently or temporarily. The nominated heir will not pay transfer duty if, as mentioned, this has been paid by the deceased.

“This law,” said Steward, “is likely to encourage people to pass on property intact rather than to sell it and leave the proceeds to their heirs.”

Article by: www.anneporter.co.za