As a buyer you need to be aware that if your seller is a non-resident you have to withhold a portion of the purchase price and pay it over to the Receiver of Revenue, in accordance with new withholding tax laws.

"Amendments to the Revenue Laws Amendment Bill, coming into effect on 1 September 2007 will have serious ramifications for those who buy property in South Africa from non-South African residents," says Bill Rawson, chairperson of Rawson Properties.

So what’s the deal?

"If the purchase price of the property sold exceeds R2-million, according to amendments to legislation, the purchaser, his conveyancer and his estate agent are responsible for investigating the seller’s residence status," notes Rawson.

If you have any reason to suspect that the seller doesn’t have a resident’s permit — you are legally bound to withhold five percent of the purchase price. If the seller is a company 7.5 percent would have to be withheld, and if the seller is a trust — 10 percent if the sale must be withheld.

"This amount has to be paid to Sars within 14 days — which can be extended to 28 days if the purchaser is a non-resident. The withholding tax is an advance payment on the tax ultimately payable by the non-South African seller when he or she submits tax returns to Sars," says Rawson.

Full story on: http://iafrica.com/property/buying_selling/788587.htm