Electrical Compliance Certificate In the past there has been great confusion as to the time period that the Electrical Certificate of Compliance remains valid. Before 1 May 2009 an Electrical Certificate of Compliance had an indefinite life span and a seller could, for instance, give a purchaser an Electrical Certificate of Compliance that was 10 years old, provided that the seller did not effect any alterations to the property which affected the electrical system. The new amendment as from 1 May 2009 has now cleared up all confusion. The Electrical Certificate of Compliance that a seller has to give to a purchaser may now not be older than two years.
Clearance Figures from Council The Local Council has implemented a new system as from 1 July 2009 in terms of which an attorney applying for clearance figures has to pay R100 to the Council before the Council will process the figures. In addition to the aforesaid amount, once the figures have been calculated and issued the Council will levy a further R50 which R50 will be added to the clearance figures. Most attorneys will probably pass on this expense for the seller’s account as the attorney is, after all, requesting the figures on behalf of the seller.
Conveyancing Tariff The new conveyancing tariff came into effect on 1 July 2009. Attorneys have not had a tariff increase for the last 6 years and the said tariff increase had been widely welcomed by the industry.
Window of Opportunity New legislation will be promulgated shortly in terms of which properties that are owned by Companies and Close Corporations may be transferred to the individual owner’s name on condition that the individual lives in the property. In this event there will be no transfer duty payable in respect of this transaction. The Company or Close Corporation will not be liable for any Dividends Tax or Capital Gains Tax. When Capital Gains Tax was introduced on 1 October 2001 a window of opportunity was created in terms of which properties could be transferred out of trusts, companies and close corporations into the individual’s name and again no transfer duty was payable. Unfortunately, very few people made use of this window of opportunity. The Receiver of Revenue has again provided this window of opportunity as it is extremely costly if a Company or Close Corporation sells its main asset being the property because a dividends tax of 10% is payable on any distribution of profits and 14% capital gains tax is payable from the first rand of gain. Of course a Company or Close Corporation does not qualify for the R1,5 million capital gains tax exemption which an individual can claim on the sale of a primary residence. Should the aforesaid amendment be accepted by Parliament then, it is envisaged that the window of opportunity will run from 1 January 2010 to 31 of December 2011. Property owners whose main residence is registered in a Company or Close Corporation are urged to make use of this window of opportunity - not only to save the taxes, but also to benefit from the R1,5 million Capital Gains Tax exemption. Unfortunately this window of opportunity has not been extended to properties owned by Trusts. Article courtesy of and is taken from their September/October 2009 Issue.