How to Transfer a Property Between Family Members in South Africa | Barter McKellar

Transferring a property between family members is a common occurrence in South Africa, whether through donation, inheritance, or sale at a reduced price. However, even though the transaction occurs within a family, legal procedures, taxes and costs still apply.

At Barter McKellar, we specialize in property law and conveyancing, ensuring smooth, legally compliant property transfers within families. In this guide, we outline the legal requirements, transfer options, costs involved, and key considerations when transferring property to a child, spouse, sibling or other relatives.

1. How Can You Transfer Property to a Family Member?

Property transfers between family members in South Africa generally happen in three ways:

✔ Donation – The property is given as a gift, without financial compensation.
✔ Inheritance – The property is transferred through a deceased estate.
✔ Sale at a Reduced Price – The property is sold below market value.

Each method has legal and tax implications, which we explore in detail below.

2. Transferring Property as a Donation

A donation transfer occurs when a property owner gifts the property to a family member without receiving payment. This process requires a donation agreement and must be registered at the Deeds Office.

Key Considerations:

✔ Donations Tax applies at a rate of 20% on the value above R100,000 per year.
✔ If the donor is a spouse, no donations tax applies due to spousal exemptions.
✔ A conveyancing attorney must handle the transfer to ensure legal compliance.

Tip: If transferring a high-value property, consult a tax expert to minimize tax liabilities.

3. Transferring Property Through Inheritance (Deceased Estate)

If a family member inherits property from a deceased relative, the transfer occurs through estate administration under the Master of the High Court.

Key Steps:

✔ The executor of the estate confirms the beneficiary in the will.
✔ The property is transferred via a conveyancer and registered in the heir’s name at the Deeds Office.
✔ If the deceased had outstanding debts, they must be settled before the transfer.

Costs Involved:

✔ No Transfer Duty applies when property is inherited.
✔ Estate Administration Fees (usually 3.5% of the estate value plus VAT).
✔ Executor’s Fees for handling the estate.

Tip: If a will is unclear or missing, the property may be distributed according to the Intestate Succession Act, which could delay the transfer process.

4. Transferring Property Through a Family Sale

A family sale transfer occurs when the property is sold at full market value or at a discounted price. Even if the property is sold below market value, it is still considered a sale and transfer duty, legal fees and bond registration costs apply.

Key Considerations:

✔ Transfer duty applies based on the property’s sale price.
✔ If the sale price is below market value, SARS may question the valuation for tax purposes.
✔ A sale agreement must be drafted and signed, even if the buyer and seller are related.
✔ A conveyancing attorney must handle the legal transfer process at the Deeds Office.

Tip: If selling at a discounted rate, ensure that the sale price is reasonable to avoid scrutiny from SARS.

5. What Costs Are Involved in Transferring Property to a Family Member?

Even when transferring property within a family, the following costs may apply:

A. Transfer Duty (Payable to SARS)

• No transfer duty applies for inherited property.

• If the property is donated, transfer duty is calculated on the fair market value.

• If sold, transfer duty is based on the purchase price.

✔ Properties under R1,100,000 – No transfer duty.
✔ Properties over R1,100,000 – Transfer duty applies on a sliding scale.

Tip: If transferring property as a gift, ensure it qualifies as a donation to avoid unnecessary tax liabilities.

B. Conveyancing Fees (Legal Fees for Transfer)

A conveyancing attorney is required to draft legal documents, obtain clearance certificates, and lodge the transfer at the Deeds Office. Fees vary based on property value.

✔ The buyer (recipient) usually pays conveyancing fees, unless agreed otherwise.

C. Bond Cancellation Fees (If the Seller Has a Mortgage)

If the property is bonded, the seller must settle the outstanding loan before transfer.
✔ Bond cancellation attorney fees apply.
✔ Banks may charge early settlement penalties.

D. Other Costs to Consider

✔ Rates Clearance Certificate – Confirms municipal bills are up to date.
✔ Home Loan Registration Fees – If the recipient takes a mortgage to finance the purchase.
✔ Estate Duty – Applies to high-value inherited estates (if over R30 million).

Tip: Consult a property attorney to get a full cost breakdown before proceeding with the transfer.

6. Steps to Transfer a Property Between Family Members

Step 1: Choose the Transfer Method

Decide whether the transfer will be through donation, inheritance, or sale.

Step 2: Appoint a Conveyancer

Hire a conveyancing attorney to draft the necessary documents and handle the legal transfer.

Step 3: Sign Legal Documents

✔ For a Sale – A sale agreement must be drafted and signed.
✔ For a Donation – A donation agreement is required.
✔ For Inheritance – The executor must authorize the transfer.

Step 4: Obtain Required Certificates

✔ Rates Clearance Certificate (from the municipality).
✔ Transfer Duty Receipt (if applicable).

Step 5: Lodge Transfer at the Deeds Office

The conveyancing attorney submits the transfer documents for registration.
✔ Once approved, the property is officially transferred into the new owner’s name.

Tip: The process typically takes 8 to 12 weeks, depending on bank approvals, municipal clearance, and Deeds Office processing times.

7. How to Avoid Delays in Family Property Transfers

✔ Ensure the property has no legal disputes (title deed issues, outstanding municipal rates).
✔ Work with an experienced conveyancer to speed up paperwork and approvals.
✔ For sales, agree on a fair purchase price to prevent SARS valuation challenges.
✔ For inherited properties, ensure the estate is wound up before attempting to transfer.

Why Choose Barter McKellar for Your Property Transfer?

At Barter McKellar, we specialize in family property transfers, ensuring a smooth, legally compliant process. Our team provides:

✔ Expert guidance on donations, inheritance, and family sales.
✔ Assistance with tax structuring to minimize costs.
✔ Efficient conveyancing services to avoid delays.
✔ Transparent cost estimates before proceeding with a transfer.

Whether you’re gifting a property, handling an inheritance, or selling within the family, we ensure that the transfer is seamless and legally sound.

Need Help with a Family Property Transfer? Contact Us Today!