Purchasers often find themselves in a position where they are eager make an offer on a property, but not sure yet in whose name or in which entity they would like to register the property. If not handled correctly, SARS may levy double transfer duty on such transactions.
There are two options available to such Purchasers; the first option is to add “or nominee” after the Purchaser’s name. The Purchaser then has until midnight of the day of acceptance of the offer to nominate another party as Purchaser, failing which, the first Purchaser will remain bound by the agreement or they may attract double transfer duty.
The second option is where a special condition may be inserted into an offer whereby the Purchaser may require the Seller to enter into a Tripartite agreement with another party on the same terms and conditions as contained in the offer being made, usually within a set timeframe. Provided the purchase price remains the same and the Tripartite is correctly drafted, these transactions do not attract double transfer duty.
Contact Martin Sheard of STBB for any conveyancing queries at MartinS@stbb.co.za.