"Since the onset of the recession in 2008, there have been one or two cases where the seller was prevented by SARS from giving transfer until he had cleaned up his act with them," King says.
The attorneys at STBB have warned that this year SARS are taking steps to check whether property sellers have outstanding payments or, even worse, have not filed tax returns. Where this is the case, it appears that SARS can insist that the property seller meets all debts owed to SARS and he may also have to provide security for the VAT payments on the sale, if applicable. In addition, the seller's attorney can be instructed to pay the VAT directly to SARS within five days of registration from the funds received for the sale.
"Since the recession there have always been a handful of people selling their homes to pay off other debts and it seems that this will continue for another six months or so. What SARS is telling such people is that debts owing to them must be paid off first, and there are no exceptions to the rule. SARS' ability to block transfer means that they very definitely have the whip handle here and sellers will have to comply," King concludes.
