The last proviso to section 65 of the Deeds Registries Act, 47 of 1937, provides for the creation of negative personal servitudes in a deed of transfer of immovable property tendered for registration provided such condition is capable of being enforced by some person. It is thus clear that the conditions may be created in the power of attorney to transfer the immovable property, and incorporated as a condition in the deed of transfer. However, the question begging an answer is whether there is any transfer duty payable on the creation of such condition(s).
It is submitted that the answer to the question can be found in section 2 of the Transfer Duty Act, 40 of 1949, which reads as follows:
“…….. there shall be levied …….. on the value of property acquired by any person …….. by way of a transaction or in any other manner, or on the amount by which the value of any property is enhanced by the renunciation.” (my underlining)
Furthermore “property” and "transaction" are defined in section 1 as follows:
- “property means any real right in land ……..”
- “transaction means …….. an agreement whereby one party thereto agrees to sell, grant, waive, donate, cede, exchanged, lease or otherwise dispose of property to another person or any act whereby any person renounces any right in or restriction in his or her favour upon the use or disposal of property ……..”
From the quoted section 2 and the two quoted definitions it is abundantly clear that the creation of a negative personal servitude in favour of somebody else than the transferor will attract transfer duty and the transaction will have to be accompanied with two transfer duty receipts, i.e. one for the transfer of the land and one for the creation of the negative personal servitude.
In instances where positive or negative personal or praedial servitudes are created in favour of the transferor in the power of attorney to transfer immovable property, no transfer duty is payable on the creation of such servitudes.
Cognizance must, however, be taken of CRC 14 of 2000 which provides that no transfer duty or transfer duty receipts need be lodged in instances where the servitude/s are being created in favour of the Municipality or State , as contemplated in section 9(1)(b) and (Bb) of the Transfer Duty Act, Act 40 of 1949.