New property tax

According to Deloitte Tax manager Jenny Klein, the draft tax proposals aim at getting buyers of property to collect the Capital Gains Tax (CGT) on behalf of non-resident sellers where the purchase price exceeds R1-m. The draft law, which has been released for public comment, intends to place an obligation on buyers to withhold the tax due and then hand it over to Sars, instead of paying the full purchase price to the seller.

Estate agents and conveyancers will therefore have an obligation to notify purchasers that the seller is non-resident with a corresponding liability for unpaid tax. If the estate agent or conveyancer "knows or should reasonably have known" that the seller was not a resident and fails to notify the purchaser accordingly will be jointly and severally liable, up to the amount of their commission or fees in respect of the disposal of the property.

Article on Moneymax

Extracts from the Draft Revenue Laws Amendment Bill and the corresponding explanatory memorandum