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Property: Buying or Selling? Get Your House in Order

Tuesday, 01 May 2007   (0 Comments)
Posted by: Author: Gavin Goërtz
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Property: Buying or Selling? Get Your House in Order 

The joy of selling or buying a property may be short-lived should your tax affairs not be in order.To ensure tax compliance, SARS has embarked on a practice of looking into the affairs of sellers and buyers when application is made for a Transfer Duty receipt or exemption.This receipt or exemption is filed at the Deeds Office for purposes of registration of a transfer.

SARS will check whether both parties are registered for tax purposes and whether their tax returns and the payment of any assessments are up to date.Any problems will be communicated to the conveyancer who has been appointed to attend to the registration of transfer.

Should such problems not be resolved to the satisfaction of SARS, the transfer process may be delayed as SARS may withhold the issue of a Transfer Duty receipt or exemption until such time as it has taken the necessary steps to ensure tax compliance.

These steps can include the attachment of property or the appointment of the conveyancer as the agent of SARS for collection purposes.Under such circumstances the conveyancer would be obliged to pay over any proceeds to SARS which may be due to the seller.

Estate agents would be well advised to inform sellers and purchasers of the aforegoing and request the parties to timeously get their tax affairs in order so as to avoid any delays or nasty surprises occurring in the transfer process.The same information which has been submitted to SARS for Transfer Duty purposes may, in due course, be used by SARS to verify that sellers have correctly disclosed the disposal of their property in their tax returns for Capital Gains Tax purposes.

This new procedure illustrates how effective SARS is becoming in policing the tax obligations of taxpayers.We advise all clients to refrain from entering into any transactions involving the purchase and sale of immovable property until their tax affairs (meaning outstanding tax returns and outstanding taxes due) are completely in order.  

Source: By Gavin Goërtz (TaxTALK)



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