Transfers: Rates Department Operations During Lockdown

by tpg | 15, 05, 20 | Uncategorized

Rates Department Operations During Lockdown

The Municipal Rates Department operations during lockdown have changed. From 13 May 2020, municipalities are allowed to perform various legislated functions including operations relating to municipal services and revenue collection. Each municipality will still have to adhere to the social distancing guidelines imposed by the government.

As the rates departments begin to operate, we should be mindful that there will be backlogs of:

1. Processing of payments for the issuing of rates clearance certificates;
2. New applications for rates clearance certificates which may have expired during the lockdown; and
3. New applications for transfers anticipated to be lodged in the Deeds Office.

Therefore, the municipalities will take some time to attend to these backlogs as well as doing so with a limited amount of staff.

eThekwini Municipality advised that they will be operating from 13 May 2020 as follows:

1. The rates clearance certificate department will open with a skeleton staff on a rotational basis, working daily from 07h00 to 18h00. This also applies to all other departments involved in the Revenue Clearance value chain.
2. Due to Social Distancing guidelines and in the best interest of the health and safety of the Clearance staff, no outsiders (i.e. conveyancers, estate agents, buyers or sellers) will be allowed into the rates clearance department.

Conveyancers are also permitted to contact the municipality regarding their rates clearance certificates which expired between 27 March and 31 May 2020 so hopefully, the issue of replacement certificates will be quicker.

The following municipalities are already working with skeleton staff:

Should you have any queries on the transfer process, please do not hesitate to contact our conveyancer, Marchelle Botha or visit our website.

Utilising the common property during lockdown

by tpg | 16, 04, 20 | Uncategorized

Is utilising the common property prohibited during lockdown?

We have received queries from various clients as to whether owners are restricted in terms of the lockdown to their units, or whether they are entitled to continue utilising the common property.

In terms of the Sectional Titles Schemes Management Act, ownership of a sectional title unit is defined as comprising of the unit or a section or an undivided share in the common property forming part of such unit.

In terms of the Disaster Management Regulations issued in respect of the lockdown by Dr Nkosazana Zuma, MP:

• Gatherings are defined as an assembly, concourse or procession, all of which are prohibited save for funerals.
• Lockdown means the restriction of movement of persons during the period for which the regulations are in force and effect.
• In terms of Regulation 11B (1) (a) (i) for the period of lockdown, every person is confined to their place of residence, unless for selected emergency services or obtaining essential services.

It is therefore unclear as to whether, in respect of community schemes, the owners of the units and common property are then entitled to utilise the common property. To this end, Graham Paddock, an expert within the field, together with Professor C.G Van der Merwe, has drafted a letter to the government asking them to clarify this and has included the suggested amendments. We have a copy of the letter should you want to see it.

It is further submitted that if it does become lawful that owners be entitled to utilise common property, this would be subject to principles of social distancing being set out by the trustees or directors.

If there are any further developments on this, we shall let you know otherwise you can contact us for more information.

Transfer Duty Changes

by tpg | 11, 03, 20 | Uncategorized

Transfer Duty Changes: How does this affect your purchase?

The recent budget speech has changed the method of calculating transfer duty on the sale of immovable property. Any sale concluded after 1 March 2020 will have transfer duty payable in accordance with the following scales:

2021 Period (1 March 2020 – 28 February 2021)

If you concluded your sale before 29 February 2020, the previous scales will still apply as per the below:

2020 Period (1 March 2019 – 29 February 2020)  

What does this mean?

If you purchased a property for R950 000,00 in the 2020 period, then you would pay duty on R50 000,00 at a rate of 3%, therefore R1 500,00 transfer duty would be payable.

If the same property is purchased for the same amount of R950 000,00 in the 2021 period, the transfer duty is at a rate of 0%, therefore the amount of transfer duty payable would be R0,00.

The calculation of the transfer duty on the above scales is dependent on the date the sale agreement was signed by all parties (date of last party signing). It is not dependent on the date that suspensive conditions are met, even though suspensive conditions make the sale conclusive.

Please also take into account, when transfer duty is calculated, SARS may determine that the higher amount between a municipal value or purchase price be used in determining the amount of transfer duty payable. Therefore, if a municipal value is higher than the purchase price, you might be liable to pay a higher amount of transfer duty. In these instances, SARS usually requires two independent estate agent valuations in support of determining the value of the property.

Should you need to calculate the amount of transfer duty payable on your purchase price, please refer to our Conveyancing Costs Calculator on our website. Should you have any other queries regarding the transfer process, please email our Conveyancer, Marchelle Botha or call 031 266 2530.