Transfer duty exemption and Capital Gains Tax on your primary home

Many private residences were previously registered in the name of CC’s or Companies; the reasoning behind this was that should the owner sell the property, he could sell his share to the buyer and the property could remain the property of the Closed Corporation or Company. No transfer duty was payable in such an instance.

This loophole was closed, however, in 2004 by SARS, with the result that when these shares/membership interests are now transferred to the new buyer, transfer duty will be payable.

Home owners who want to transfer  their property from a CC or Company into their own name without paying any transfer duty, can do so until 31 December 2012, but other costs like auditor’s and attorney’s etc will still apply. This might help with any Capital Gains Tax, as the first R2mill profit on your main dwelling is tax free IF the property is in a private individual’s name. After R2mill  an individual will pay only 13,3% CGT, compared to 18,65% on the whole profit  for a CC. Take into consideration that you are allowed  to subtract your expenses to make the profit margin smaller.

BUT the best thing to do is to speak to your auditor first to get the bigger picture of what else might be of relevance.