PART 2: Transfer costs and transfer duty

In terms of Section 9(1)(j) of the Transfer Duty Act 14 of 1993, divorced spouses, who acquire sole ownership in a whole or any portion of property registered in the name of his or her divorced spouse to whom he or she was married in community of property, where that property or portion is transferred to that divorced spouse as a result of the dissolution of the marriage, is exempted from the payment of any transfer duties.

Transfer duties refer to compulsory tax that is levied on the values of any property acquired by a person, payable within 6 (six) months of the acquisition date.

This exemption is only extended to the parties who were married in community of property.

Where the divorce order requires the parties to sell the property, the purchaser will pay the transfer duty of the immovable property, and the proceeds will be distributed in accordance with the divorce order.

Although parties married in community of property benefit from the exemption of the payment of transfer duties, this exemption does not extend to transfer costs. Such parties remain liable for the payment of all applicable transfer costs, which must still be settled despite the exemption of transfer duty payment.

Transfer costs, in a nutshell, entail costs such as conveyancer’s fees, administration fees, bond registration fees, deeds office fees, postage and petties. The sellers will be liable for costs such as homeowners’ association and/or body corporate levies, disbursements, rates and taxes, levies, estate agent commission, cancellation costs, etc.

Where a property is sold pursuant to a court order (unless a settlement agreement states otherwise), the responsibility for costs relating to levies, compliance, rates and taxes, agents commission and bond cancellation costs are shared between the parties involved. The purchaser or the party taking transfer of the property will be liable for the applicable transfer costs associated with acquiring the property.

CONCLUSION

Navigating the legal complexities of divorce, particularly regarding the division and transfer of immovable property, requires a clear understanding of the applicable marital property regime and the legal processes involved.

Whether the property is transferred by way of endorsement or through a formal conveyancing process, each route carries its own implications in terms of cost, legal requirements and duties payable.

Divorcing parties need to be aware of their rights and obligations under the law to ensure a smooth and legally compliant transition. The correct application of the Deeds Registries Act and the Transfer Duty Act can significantly impact the financial and administrative outcomes of the property division process. It is the conveyancer’s duty to always seek the most cost-effective manner to transfer a property.

For any further assistance or legal guidance on divorce proceedings or property transfer matters, contact Chrissie Turck or Natasha Nekuta, Litigators and Conveyancers at WKH Inc., who specialize in these areas and are available to provide expert assistance.