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

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.

An HOA can lawfully limit/refuse an owner to purchase pre-paid water and electricity vouchers.

In an earlier post, I mentioned that no-one but a municipality could switch off a defaulting owner’s electricity, and that if a landlord did so, the tenant could bring a spoliation application, forcing the landlord to restore the service.

What happens if the rules of a Homeowners Association (‘the HOA’) provide that the HOA can deny services to an owner that is in breach of its rules? The question is whether a party can contractually agree to forfeit certain rights to his property.

The court had to determine that in the case of Van Rooyen v Hillandale Homeowners Association (1603/2014) [2014] ZAFSHC 226 (11 December 2014).

An owner (van Rooyen) failed to pay certain penalties relating to the latter’s failure to adhere to the HOA’s aesthetical rules. As a result, the HOA limited the owner’s electrical supply. Van Rooyen approached the court in terms of the mandament van spolie for an order restoring his access to and use of electricity.

The court found that the actions of the HOA didn’t amount to spoliation:

‘I am satisfied that the trust’s failure to adhere to the aesthetical rules triggered the imposition of penalties which remained unpaid. The rules and the contract entered into between the trust and the respondent, are binding on the applicant. The respondent was entitled or had the power to refuse to sell applicant prepaid water and electricity vouchers, or to limit the number of units to be sold to applicant. Respondent’s conduct was therefore not unlawful as it acted within the rules and the agreement it entered into with the trust. The conduct of the respondent did therefore not amount to spoliation’.

The court stated further that:

‘It is trite that parties are free to contract as they please. The law permits perfect freedom of contract. Parties are left to make their own agreements, and whatever the agreements are, the law will enforce them provided they contain nothing illegal or immoral or against public policy’. 

On this basis, it could be argued that a tenant can contractually agree to forfeit certain rights to his property, in a lease, or an owner of a sectional title unit can be bound by restrictive Conduct Rules.

Maintenance Courts letting down single mothers

Single mothers applying for child maintenance in KwaZulu-Natal are frustrated with having to deal with unhelpful court staff and a justice system they believe has failed them, says a report in the Daily News that recounts the experiences of several applicants. It says they feel that maintenance courts do not protect the rights of single mothers and their children and say that the process of applying for maintenance is an ‘embarrassing and shameful’ experience. Many said that mothers are ridiculed at the courts and treated like criminals. One of the issues facing maintenance courts, according to the report, is inadequate staff which impacts heavily on the process of maintenance orders. Nationally, there are only 427 court clerks, 86 maintenance officers, 140 maintenance investigators. At the Durban Magistrates’ Court, there are six court clerks and three maintenance officers. Umlazi court has six clerks and two maintenance officers. Pietermaritzburg has only five maintenance officers.

Commission rules in favour of homos exual guesthouses

Homos exual guesthouses that exclude heteros exual couples, women and l esbians have been given the green light by the Commission for Gender Equality (CGE). According to a Sunday Times report, the commission’s ruling said it was possible to discriminate positively. Wits University law lecturer Tracy-Lynn Field is quoted as saying that although the constitutionality of the ruling could still be tested, recommendations made by organisations such as the CGE carried a lot of weight. Field said the Constitution only prohibited unfair discrimination. ‘So the question is, there may be discrimination but the issue is, is it unfair or not?’ The ruling comes after the G ay and L esbian Alliance asked the SA Human Rights Commission (SAHRC) to investigate 11 businesses on the grounds that their exclusivity denied the public access on the basis of s exual orientation, skin colour, gender or religion. The SAHRC referred the complaint to the CGE which, in its ruling, said that ‘accommodation of this nature is necessary in our democratic society to advance legitimate interests of the aforementioned groups’. SAHRC chairman Jody Kollapen said he was worried about the effects of exclusivity. ‘While it may be acceptable to have an association that is established to advance the interest of a particular group, it’s quite different when you are dealing with public facilities.’
Full Sunday Times report

 

Supplied courtesy of Legalbrief Today.