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February 28, 2015

Good news for some property buyers

Courtesy Bowman Gilfillan Newsflash: Transfer Duty Increase

Finance Minister Nhlanhla Nene’s announcement regarding the new tax breaks for purchasing property will be welcomed by middle income buyers in South Africa.

Transfer duty rates were last amended in February 2011. The revised transfer duty rates will apply to properties acquired under transactions concluded on or after 1 March 2015 by any person, including companies, close corporations or trusts. While these rates will ease the burden on the middle class buyers, they will not, however, favour the affluent buyer who will have to pay more.
The transfer duty rates for agreements concluded after 28 February 2011 but before 1 March 2015 were as flollows:
  • Value of property R0 - R600 000,00 Rate 0%
  • Value of property R600 001,00 - R1 000 000,00 Rate 3% (up to a maximum of R12 000,00)
  • Value of property R1 000 001,00 - R1 500 000,00 Rate R12 000,00 plus 5% of the value exceeding R1 000 000,00
  • Value of property R1 500 001,00 and above Rate R37 000,00 plus 8% of the value exceeding R1 500 000,00
The revised transfer duty rates will apply to properties acquired under agreements  concluded on or after 1 March 2015 are:
  • Value of property R0- R750 000,00 Rate 0 %
  • Value of property R750 001,00 – R1 250 000,00 Rate 3% (up to a maximum R15 000,00)
  • Value of property R1 250 001,00 – R1 750 000,00 Rate (R15 000,00 plus 6% of the value exceeding R1 250 000,00)
  • Value of property R1 750 001,00 – R2 250 000,00 Rate (R45 000,00 plus 8 % of the value exceeding R1 750 000,00)
  • Value of property R2 250 001,00 Rate and above (R85 000,00 plus 11% the value exceeding R2 250 000,00)
No transfer duty will be paid on property acquired below R750 000,00. Apart from helping entry-level buyers, Treasury's new rules will also decrease the effective transfer duty payable for all other properties acquired up to about R2 300 000,00 and an increase in property with a value in excess of R2 700 000,00.
This is illustrated by an example below:
Before 01 March 2015
Property purchased amount
Transfer duty payable
R 1,750 000,00
R   57 000,00
R 2,300 000,00
R 101 000,00
R 2,700 000,00
R 133 000,00
R 3,000 000,00
R 157 000,00
R 3,500 000,00
R 197 000,00
With the revised rates, the transfer duty will be as follows:
Property purchased amount
Transfer duty payable
R 1,750 000,00
R  45  000,00
R 2,300 000,00
R  90  500,00
R 2,700 000,00
R 134 500,00
R 3,000 000,00
R 167 500,00
R 3,500 000,00
R 225 000,00
For any enquiries please contact: Bobby Bertrand and Insaaf Davids

February 24, 2015

Can I list a debtor as a bad payer with the credit bureaus?

A credit granting business client can list a business or individual, who has defaulted on payment in accordance with the National Credit Act (NCA) regulations, directly onto the several Credit Bureau Default Listing databases.

This listing will immediately appear on the person's Consumer Credit Report as adverse information under Default listings. In the case of a business, the Default listing will immediately appear on the business's Business Credit Report under Default listings.
Default listings will negatively influence the person or business's credit rating and will reflect on their credit report for a minimum of two years.
These are the steps to follow:
·        In terms of section 72 of the NCA, you are obliged to give your debtor 20 days’ notice of your intention to provide the credit bureaus with any adverse information, and the debtor is entitled to challenge the accuracy of any such information so provided;

·        If, within 20 days, you persist in listing the debtor, it can challenge the accuracy of the information proposed to be reported to a credit bureau or to the National Credit Register.