… The first step is to establish whether the parties were married In or Out of community of property. How the parties were married will determine the type of divorce transfer that will need to be registered. If they were married in community of property, then an endorsement will take place (instead of a transfer) in terms of a Section 45b is application. The Deeds Office will stamp the existing Title Deed with an endorsement to confirm which one of the parties have taken over the ownership and liability of the property. If the parties were married out of community of property then a half share transfer will need to be registered, where the one party transfers their share to the other.
… And now they no longer want to remain co-owners of the property. In this case a sale agreement will need to be concluded by both parties which will become the basis of the transaction.
To transfer half the property from one co-owner to the other is essentially a similar process as for a transfer of the whole property. All the same clearance certificates will be required to transfer the half share in the Deeds Office. The reason for this is that the Deeds Office views the transaction as an ‘acquisition’ and when a transfer of assets takes place, the relevant rates and taxes and levy clearances are required, irrespective of it only being a half share that is being transferred; or if the [rates & levy] accounts are already in the name of the person who is going to retain the property. The half share transfer cannot proceed until the rates and/or levy clearance certificates have been issued. This is a requirement by the Deeds Office. The only difference of a half share transfer from a transfer of the whole property is how the fees and transfer duties are calculated and the various types of documents to be lodged, which the parties will need to sign.
■ Transfer Duty Receipt from SARS;
■ Two Estate Agents valuations are required by SARS to establish the value of the property and thereafter calculate the transfer duty amount and transfer and bond registration fees;
■ A Rates Clearance Certificate from the relevant Council;
■ A Levy Clearance Certificate for Sectional Title properties and
■ A Homeowners Clearance Certificate (if applicable to the property).
■ If the whole property (that is – both owners shares added together) is valued at R900 000,00 or less, then the transfer is exempt from transfer duty.
■ A Transfer Duty Receipt will still need to be obtained from SARS but no payments will be required by them. Transfer and Bond registration costs will still be applicable to the transaction.
■ SARS have formulated the calculation of transfer duty as follows :-
■ You begin by calculating the transfer duty from the value of the whole property, and once obtained you divide the amount by two for the half-share.
■ For a half-share transfer where the Conveyancer is only transferring half of the property, only half of the transfer costs are due and payable.
■ In other words if the property is valued at R 1 000 000,00 then the transfer costs are calculated on a value of R 500 000,00.
■ If the property is to be transferred in terms of a Divorce or Estate transfer, then the transaction is completely exempt from paying transfer duty to SARS and an exemption receipt will need to be obtained from SARS.
■ Transfer and Bond costs are still applicable however and will need to be paid to the Conveyancers who attend to the transactions.
■ If there is an existing bond registered over the property, an endorsement will need to be done to the bond to transfer the liability owing to the bank, to the new owner.
■ The first step will be to submit an application to the bank for the approval of the “substitution of debtor” as the bank will need to authorise the transaction.
■ Once the relevant bank has received an application for a substitution of debtor, they will do a credit check to ensure that the person taking over the property is able to afford paying the whole bond.
■ Once this is approved, the bank will forward an instruction along with the original Title Deed to a Conveyancing Attorney on their panel to attend to the substitution at the Deeds Office.
■ The transfer will not be able to proceed until the ‘bond instruction’ has been issued.
■ Alternatively the existing bond will need to be cancelled.