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Valuations

Pretoria East
In Valuations

Property valuations and property types in South Africa.

Different types of property, such as this one, could have different valuations in South Africa

When selling any type of property in South Africa, getting a valuation done is always a good idea.

 

In South Africa, property is classified either as immovable property or movable property.

 

Immovable property in South Africa

Ownership of immovable property gets registered in the deeds office, and typically involves land and building ownership. You can outright own a property, or you may hold certain registered rights over another person’s property.

Types of Property Owned in South Africa

Owned property could include Residential, Commercial, Industrial, Agricultural and Vacant properties. These are registered as full title stands, sectional title units, farms, or agricultural holdings. The deeds registry has a register of all these properties that are in existence, and records who owns each of these properties. Ownership is regulated by the Deeds Registries Act, which requires that ownership and ownership transfer be recorded in title deeds in the deeds registry. The owner typically has the right to use, sell or lease these types of property as they see fit, subject to any laws or regulations as well as restrictions recorded in the title deed

Rights over other people’s property in South Africa

Rights over other people’s property could include servitudes, usufruct and usus rights.

    • Servitudes, which are registered in the deeds registry and are legal rights that allow a person or an owner of another property to use someone else’s property or parts thereof for a specific purpose. Praedial servitudes are registered to the benefit of a specific property, and typically continue existing even if the owner of the property that benefits changes. Personal servitudes are registered to the benefit of a specific person, and typically cease to exist when the person passes away.
    • Usufruct is a right to use and benefit from the income of someone else’s property for a period of time, or until a certain event occurs. Usufructs can be created by agreement between the owner of the property and the person who will be using it, and are registered in the deeds registry to ensure that they are legally enforceable.
    • Usus is a right to use and occupy someone else’s property, such as a right to live in someone else’s house. This type of right is popular for retirement villages, where occupant purchase use rights rather than full ownership.

Movable property in South Africa

Movable property on the other hand refers to assets that can be moved or transferred from one place to another. It does not get registered in the deeds registry.

In South Africa, movable property includes:

  1. Art: This includes paintings, sculptures, and other forms of art.
  2. Vehicles: This includes cars, trucks, and other vehicles.
  3. Plant and equipment: This refers to machinery and equipment used in agriculture, manufacturing, construction and other industries.
  4. Intellectual property: This includes intangible assets such as patents, trademarks, and copyrights.
  5. Licenses: This refers to a legal agreement that allows someone to use a specific product, patent or business methodology.
  6. Patents: This refers to a legal right granted to the inventor of a new invention – that prevents others from making, using, or selling the invention without permission.
Different types of property, such as this one, could have different valuations in South Africa
Each of these types of property has a value. If you need to determine or estimate the value of any such a property, one would be able to obtain a formal valuation or an expert opinion of the value thereof.
Chrisjan van Heerden
In Valuations

The purpose of two independent estate agent valuations

Lawyer asking for two independent estate agent valuations

 My lawyer asked for two independent estate agent valuations. Why?

Your transfer lawyer may be asking you for two independent estate agent valuations if you are acquiring a South African property in one of the following ways:

  • Buying half a share, or any other fraction of ownership of a property
  • Inheriting a property
  • Buying a property from someone who has the same surname as you
  • Obtaining a property from someone who is related to you

The Importance of Two Independent Estate Agent Valuations in Property Transactions: A Guide to SARS Transfer Duty

When navigating the process of acquiring property in South Africa, you may find yourself wondering why your transfer lawyer is requesting two independent estate agent valuations. The answer lies in the intricate workings of the South African Revenue Service (SARS) and its need for accurate calculations of transfer duty. In this article, we’ll explore the significance of obtaining two independent estate agent valuations and how it plays a crucial role in ensuring a fair and accurate assessment of transfer duty.

Understanding Transfer Duty and Its Implications:

Transfer duty is a tax imposed by SARS on the acquisition of immovable property. The responsibility of paying this tax falls on the individual acquiring the property, and its amount is determined by the property’s value. To avoid potential discrepancies in the valuation process, SARS has instituted a practice of requesting two valuations from independent estate agents when the buyer and seller are related parties.

The Rationale Behind Two Independent Valuations:

The key reason for soliciting two independent estate agent valuations in such cases is to counteract the possibility that the transaction price may not accurately reflect the true market value of the property. SARS recognizes that when parties involved in a property transaction are related, there is an inherent risk of a biased valuation that may not represent the actual market value. In response to this concern, SARS has implemented the requirement for two valuations to ensure a fair and unbiased determination of the property’s market value.

The Role of Independent Estate Agents:

SARS aims to obtain a comprehensive and impartial understanding of a property’s market value by engaging two independent estate agents. These agents operate separately from each other and have no vested interest in the transaction, ensuring an unbiased assessment. The selection of two distinct agents adds an extra layer of scrutiny to the valuation process, minimizing the potential for any undue influence on the final valuation figure.

Ensuring Fairness in Transfer Duty Calculation:

The ultimate goal of acquiring two independent estate agent valuations is to enable SARS to calculate transfer duty accurately and fairly. By relying on valuations from different sources, SARS establishes a robust system that guards against any attempts to manipulate property values. This process instills confidence in the tax assessment, reinforcing the principle that transfer duty is based on a genuine and unbiased reflection of the property’s market value.

Conclusion:

In conclusion, the request for two independent estate agent valuations in property transactions involving related parties is a safeguard implemented by SARS to uphold the fairness and accuracy of transfer duty calculations. This practice ensures that the tax payable accurately corresponds to the true market value of the property, thereby maintaining the integrity of the taxation system. As a participant in such transactions, understanding the rationale behind this requirement can help streamline the process and contribute to a transparent and just property acquisition experience.

The cost of two independent estate agent valuations