SARS has introduced important new compliance requirements that directly affect property transactions exceeding R2 million. Both the seller and the purchaser must now be registered for Income Tax before a Transfer Duty Receipt (TDR) will be issued. This development has significant practical consequences for buyers, sellers, and property professionals alike.
What has changed
For property transactions above R2 million, SARS will not issue a Transfer Duty Receipt unless both parties are properly registered for Income Tax. Without the TDR, the conveyancer cannot proceed with lodgement at the Deeds Office.
In practical terms:
- No Income Tax registration
- No Transfer Duty Receipt
- No lodgement
- No registration
The result is simple: the transfer is delayed.
Why this matters
Transfer duty clearance is a critical step in the conveyancing process. If either the seller or purchaser is not registered for Income Tax, SARS clearance will be postponed. This in turn delays Deeds Office lodgement, registration of transfer, and ultimately payment of proceeds and commission.
In some cases, this could push transfers out by several weeks, particularly if registration is discovered late in the process. For estate agents and property professionals, this means that commission payments may be delayed. For sellers, it may impact onward purchases or financial planning. For purchasers, it can delay occupation and bond registration.
The practical risk
Many individuals assume they are registered for Income Tax, only to discover that they are not, or that their tax number cannot be retrieved. In high-value transactions, this administrative oversight can have costly consequences. The new SARS requirement effectively makes Income Tax registration a pre-condition to transfer for properties above R2 million.
Agent and seller checklist
To prevent unnecessary delays, it is advisable to confirm upfront:
- Is the seller registered for Income Tax?
- Is the purchaser registered for Income Tax?
- Can both parties provide valid tax reference numbers?
If either party is not registered, they should register immediately before the transaction progresses.
For transactions exceeding R2 million, Income Tax registration should now form part of the standard compliance checklist alongside FICA documentation and bond approval.
Useful SARS Links
Register for Income Tax: https://www.sars.gov.za/register-for-tax/2
Check or retrieve your tax number: https://www.sars.gov.za/individuals/manage-your-tax-affairs/what-is-my-tax-number/
The conveyancing process is increasingly compliance-driven. SARS’ new requirements reinforce the importance of early verification and proactive preparation. At Swanepoel van Zyl Attorneys, we work closely with buyers, sellers, and property professionals to ensure that all SARS requirements are met timeously, helping to prevent unnecessary delays and ensure smooth property registration.