Buying property from a non-resident

By LB Vorster

On 1 September 2007, section 35A of the Income Tax Act, No 58 of 1962 (‘the Act’), came into operation.

1. In terms of Sec 35A of the Act all purchasers of immovable property (including non-residents) are burdened with a statutory duty to withhold a certain percentage of the purchase price for payment to the South African Revenue services (‘SARS’) if:

1.1. the seller is a non-resident; 1.2. the purchase price exceeds R2 000 000.

2. A purchaser is then compelled to withhold an amount equal to:

2.1. 7,5% of the purchase price if the seller is a natural person; 2.2. 10% if the seller is a company (presumably also if the seller is a close corporation – the Act only refers to a company); 2.3. 15% if the seller is a trust.

Click below to read more. (The full article can be found on page 16)