Real estate ownershipi Planning
Planning in each jurisdiction is governed by the local authorities in terms of the local government planning ordinances. In 2013, the SPLUMA was promulgated and this national legislation came into force during 2015. It is framework legislation that provides for the enactment and, where necessary, amendment of provincial and local planning legislation to ensure uniformity.
In almost all instances of commercial development, rezoning applications will have to be made to ensure that the desired density and bulk is allocated to the property from a services and infrastructure perspective.
Accordingly, rezoning approvals will require amongst others:
- traffic impact assessments;
- environmental impact review;
- consent from adjacent property owners;
- review of title conditions and other conditions of establishment relating to the broader township;
- consideration of what servitudes (or example, access and egress) may be required over adjacent properties; and
- filing of a proposed site development plan.
Once the authorities have reviewed all documentation, rezoning of the land parcel may be granted or refused. If it is refused, an appeal process can be followed.ii Environment
The National Environmental Management: Waste Act, 59 of 2008 (NEMWA) came into operation in July 2009. NEMWA (Section 40(1)) provides that no person may transfer contaminated land without informing the person to whom that land is to be transferred that the land is contaminated and, in the case of a remediation site, without notifying the Minister or the MEC and complying with any conditions that are specified by them. These provisions have direct consequences for alienation of land that may be contaminated, including potentially impacting on the right of freedom to contract for the purchase and sale of the land. In the event of non-compliance with the obligation to provide information on contaminated land in the event of transfer of such land, the same penalty provisions as are applicable to non-compliance with Section 36(5), will apply.
Owners of potentially contaminated land or persons undertaking activities that have the potential to contaminate land are advised to take note of the operation of the Contaminated Land Provisions, particularly the issues discussed above.iii Tax
If a seller is not registered for value added tax (VAT) purposes, the buyer will have to pay transfer duty in addition to the purchase price. The rates for individuals, corporations and trusts are the same, and, with effect from 1 March 2017, changed to apply as follows for the following property values:
|900,001–1.25 million rand||3% of the value above 900,000 rand|
|1,250,001–1.75 million rand||10,500 rand + 6% of the value above 1.25 million rand|
|1,750,001–2.25 million rand||40,500 rand + 8% of the value above 1.75 million rand|
|2,250,001–10 million rand||80,500 rand +11% of the value above 2.25 million rand|
|10,000,001 rand and above||933,000 rand + 13% of the value above 10 million rand|
VAT is payable either at the rate of 15 per cent (as of 1 April 2018 the VAT rate increased from 14 to 15 per cent), or in some instances 0 per cent (e.g., property is sold as a going concern) or in some instances exemptions may apply, for example to charitable institutions.
Transfer duty is payable within six months from the date of acquisition (i.e., the signing of the sale agreement). If the transfer duty is not paid within this period, transfer duty penalties will be levied.