When buying or selling property, most people focus on the purchase price, bond approvals, and how long the transfer will take. What often comes as a surprise, however, is how compliance requirements from the South African Revenue Service (SARS) can influence the progress of a property transaction.
Recent enhancements to the Transfer Duty Declaration on SARS eFiling have introduced additional validation measures aimed at improving compliance, reducing inaccurate declarations, and strengthening tax administration during property transactions. While these updates are primarily administrative, they have practical implications for both buyers and sellers and can affect the speed at which a transfer proceeds.
Tax reference numbers now play a bigger role
One of the most important aspects of the updated requirements is the increased emphasis on providing tax reference numbers during the SARS application process.
For property transactions where the purchase price is R2 million or more, SARS requires a valid income tax reference number for both the seller and the buyer where they are individuals. This requirement applies to both South African residents and foreign individuals.
Where a buyer or seller already has a South African income tax number, it must be disclosed in the SARS declaration, regardless of the value of the property transaction.
Foreign buyers who do not yet have a South African tax number may initially indicate this in the system by selecting a reason for not being registered for income tax. However, if the purchase price exceeds R2 million, the buyer will be required to obtain and provide a South African income tax number before the declaration can be successfully processed.
For foreign buyers or sellers involved in higher-value transactions, this may mean registering with SARS earlier in the process to avoid unnecessary delays.
Understanding system alerts during the submission process
Conveyancing platforms used to submit SARS applications include built-in validation mechanisms designed to reduce the submission of incomplete or inaccurate information.
In practice, these systems display different types of alerts. Yellow warning icons generally indicate that there is information worth noting but they do not prevent the application from being submitted. Red highlighted fields, on the other hand, indicate information that SARS requires before a submission can be completed.
In certain transactions where the purchase price is below R2 million, the system may still display a red exclamation icon within the buyer’s details section. SARS has confirmed that this indicator may be ignored in these lower-value matters and that the application may proceed to submission.
Understanding the difference between system warnings and mandatory requirements helps conveyancers manage submissions efficiently and prevents unnecessary concern for clients.
Additional information required where sellers are married in community of property
Where sellers are married in community of property, SARS requires the details of both spouses to be captured in the transfer duty declaration. This is because both spouses are regarded in law as joint owners of the property.
Providing the information of both spouses at the outset of the transaction helps ensure that the SARS submission can proceed without interruption.
Other updates to the SARS declaration
As part of the latest enhancements to the transfer duty declaration, certain information fields have also been adjusted. The annual income field has been removed from the form and is no longer required, and the marital status section now includes “Divorced” as an additional option. These changes are aimed at ensuring that personal information recorded in the declaration more accurately reflects a taxpayer’s status.
Why preparation matters
Although these requirements may seem purely administrative, the SARS declaration is a critical step in the property transfer process. If the required information is not available when the declaration must be submitted, the transaction may be delayed.
By ensuring that tax reference numbers, marital details and other personal information are readily available from the start of the process, buyers and sellers can help ensure that the transfer progresses as smoothly as possible.
Property transactions are significant milestones, and understanding the latest compliance requirements allows clients to move forward with greater confidence and fewer unexpected delays.
Sameer Patel | Candidate Legal Practitioner