Why you should not purchase property in your personal name

by Johan Oosthuizen

Personal Property

Buying immovable property can be a daunting undertaking with a vast number of practical, legal and tax implications to consider. With all things considered, property was, and will forever be one of the safest and most profitable businesses to conduct.

We will consider the pitfalls related to the outdated but favourite method, currently still used by thousands of people, namely, purchasing property in your personal name.


Unlike a trust, a natural person will certainly cease to exist at some point in time, and in the certain event of death, winding up of a deceased person's estate is a lengthy and complicated process.

How does this relate to property investments?


  1. The time implication

    Any heirs entitled to the property will not have full use and enjoyment of the property until the property has been finally transferred to their names. This may only happen in the final stages of the winding up of the estate and after the liquidation and distribution account has been drafted and approved by the Master of the High Court.

    After the above burdensome process has been complied with, the conveyancer appointed to attend to the transfer will first have to acquire permission from the Master to finalise transfer by means of a lengthy application known as a 42(2) endorsement, which is regulated by Section 42(2) of the Administration of Estates Act No. 66 of 1965 (as amended). This application for the Master's endorsement delays the process even more and may cause incredible hardship for those left behind. 

  1. The financial burden

    The executor's fees are paid out of the estate and the executor is entitled to remuneration up to 3.5% of the entire estate's value.

    The 3.5% does not include fees payable to your conveyancer, who will be responsible for the transfer of the property.

    Estate duty is payable on all estates with a value greater than R3,5 million. This may seem like a large amount, but it is important to note that life insurance is deemed an asset in your estate and forms part of this calculation. Estate duty is currently calculated at 20% of the estate value greater than the abovementioned amount.  

    Capital gains tax becomes due and payable on property transferred out of the estate. Value growth on property is taxable at 18% growth from base cost. There is currently an exemption of R2 million applicable to this mode of ownership, on the condition that the property is your primary residence. However, it is important to note that this exemption is a lifetime exemption, and the chances are great that this amount has already been satisfied during the lifetime of the deceased person. A second property purchased in your own name which is not your primary residence will be subject to full capital gains tax.

  1. Creditors

    In the event of a deceased estate, creditors will have the right to claim debts owed to them from the estate and this may have the effect that the whole estate is liquidated to satisfy all creditors.

    During the lifetime of the debtor, the same will apply, and any creditor may attach immovable property registered in your personal name to be sold in execution of debt.

With the famous Wealth Masters Double Trust Structure, you will be able to rest assured that your loved ones will be fully supported by your legacy that you build on today. Income generated on your properties will be for your own benefit and no one else's. Creditors will be kept far away from that which you have worked hard to accumulate during your time on earth, and many an hour will be saved on time otherwise wasted.

To be put in contact with a Treasury Trust lawyer, please contact services@wealthmastersclub.com