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SARS to check up on estate agents' tax affairs   Article Date :29 Jul 2005 Recent changes to transfer duty documentation. Recent changes to transfer duty documentation indicate that the South African Revenue Services will be making sure that estate agencies pay tax and VAT on commissions, and that individual estate agents pay income tax on their earnings. Bill Rawson, president of the Institute of Estate Agents, says that the new forms and procedures require conveyancers or, in some instances, estate agencies themselves, to report the agents' commission earnings on a sale-by-sale basis. This is one of several measures which SARS has introduced over the past few years to close loopholes and improve tax collection in relation to property sales. Rawson says that the new forms ask for the estate agency's name and VAT registration number, the amount of commission payable on the sale, and the name of the individual estate agent who negotiated the sale. "However, the form doesn't take into account that more than one estate agency, or more than one estate agent within a firm, can be involved in a single sale," says Rawson. "There are many sales which involve two firms in a fee-sharing arrangement. And within a firm, there might well be two agents involved, either as partners, or in a referral arrangement whereby the agent who concludes the sale pays a portion of his or her commission to a colleague who provided the lead to the seller or buyer. Presumably, in such cases, the conveyancer will have to identify all the firms and individual agents involved." One of the new forms provides for property sales which do not pass through the Deeds Office and therefore do not involve conveyancers, namely if the property is owned by a company or a CC or a trust and the buyer buys that entity in order to obtain the property. Transfer duty is still payable, and in such a case, it is the estate agency which must submit the required form (TD7) to SARS, within six months of concluding the sale. The new forms are available on the SARS website: www.sars.gov.za CLICK HERE TO RETURN TO THE MAIN NEWS PAGE