Transfer of Property with Divorce
NO TRANSFER DUTY PAYABLE ON TRANSFERS OF PROPERTY ARISING FROM DIVORCE TO ONE OF THE DIVORCED SPOUSES
According to clause 16 of the Business Tax Amnesty and Amendment of Taxation Laws Act No.9 of 2006 a divorced spouse will not have to pay transfer duty on the acquired share of property.
Previously the exemption only applied where the spouses had been married in community of property and as regards the acquirer’s existing half share in the property.Thus, if they had been married in community of property, and the wife acquired the former husbands share in the property, half of the value of the property was subject to transfer duty. If the whole property was worth R1.2 million, the former wife had to pay transfer duty on R600 000,00.
In terms of the amendment, she would not have to pay any transfer duty now. However, if they had been married out of community of property and the former wife acquired a property worth R1.2 million from the former husband, she would have had to pay transfer duty on the full R1.2 million but now the transaction is exempt from transfer duty.
This new exemption applies to all divorces granted on or after 25 July 2006.
Further cost involved with the transfer of property might be:
1) Bond registration fee on only 50% of the value and
2) Attorney fees also on only 50% of the value of the property. Make sure that you are charged only on 50% of the value of the property.
Also keep in mind that you will have to budget for deposits on Municipal Services. Rehabilitive maintenance can be used in this instance.
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