AGENT’S OBLIGATIONS WHEN DEALING WITH FOREIGN SELLERS OF IMMOVABLE PROPERTY

It is important to understand the obligations of the Estate Agent and Conveyancer when dealing with a Seller who is not a South African resident.  When the Purchaser pays the purchase price for a South African property to a non-resident Seller or to an Estate Agent or to a Conveyancer, the Purchaser must withhold an amount from the payment, this amount is to be paid directly to SARS as an advance payment for the non-resident Seller’s tax liability.  If a non-resident Seller is an individual the amount to be withheld is 5%.  In the case of a Company, it is 7.5% and in the case of a Trust it is 10%.

The Estate Agent and / or Conveyancer who acts on behalf of the non-resident Seller is obliged to inform the Purchaser about the non-residence status of the Seller.  If the Agent and / or Conveyancer fail to do so, he or she may be held personally liable to pay the amount that should have been withheld to SARS.

With regards to the Estate Agent, this amount however is limited to the amount that does not exceed the commission earned on the sale