Tax and SARS knowledge base
Can a conveyancer be liable for missed seller withholding?
Can a conveyancer be liable for missed non-resident seller withholding?
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Direct answer
Potential liability for a missed section 35A withholding obligation is a legal question that depends on the statute and the transaction facts. SARS's current guide makes clear that purchasers, conveyancers and estate agents have roles in the non-resident property-sale process, including completing and submitting the purchaser-side NR02 declaration. A conveyancer should therefore treat seller residency, the R2 million threshold, withholding, NR02 and any NR03 directive as core transfer controls, not as a late administrative task.
This guide does not decide whether a particular person is liable. Get legal and tax advice immediately if the sale may involve a non-resident seller and the withholding process was missed, funds have already been paid, or the information is incomplete.
What this means in practice
The SARS guide says that where the aggregate amount payable for the acquisition exceeds R2 million, the published withholding rates for a non-resident seller are 7.5% for a natural person, 10% for a company and 15% for a trust. Where the threshold is exceeded, the percentage is applied to the full purchase price. The purchaser-side process cannot be safely managed by assuming a seller is resident or by waiting until lodgement.
A conveyancer is usually well placed to collect the sale agreement, property description, payment schedule and identity information. That operational role should be supported by a clear escalation path for residency questions. If the seller's position is uncertain, do not make a legal conclusion from a foreign address, passport or citizenship. Obtain a written representation and refer the issue to an appropriate tax adviser.
Step-by-step
- Add a non-resident seller check to the opening transfer checklist. Obtain the seller's declaration and identify whether professional tax input is needed.
- Confirm the property is South African immovable property and identify the aggregate purchase consideration. Record why the R2 million threshold is or is not met.
- If section 35A may apply, calculate the standard published amount according to seller type. Do not treat this as final tax; SARS calls it an advance payment for the seller's year of disposal.
- Obtain and complete the current NR02 declaration from accurate source documents. SARS says purchaser, conveyancer or estate agent completes and submits NR02.
- Ask whether the seller is applying for an NR03 directive. The seller-side directive can reduce or remove withholding only if SARS approves it. Preserve the directive and follow its terms exactly.
- Follow the current SARS transfer-duty instructions. The guide says the conveyancer must answer the section 35A question when applying for a Transfer Duty receipt and upload NR02 or NR03 with the deed of sale.
- Keep a signed record of each decision, submission acknowledgement, directive and payment. Ensure the file makes it possible to reconstruct what was known before money was released.
- Escalate immediately if a required form was not filed, a directive was not received in time, payment has been released, or facts about residency change. Do not try to repair a potential statutory issue informally.
Documents and records to keep
- Seller representations and the advice obtained on residency.
- Sale agreement, title-deed description and payment schedule.
- R2 million threshold and withholding calculation.
- NR02, NR03, SARS directive and submission proof.
- Transfer-duty records and payment evidence.
Important limits and exceptions
Section 35A has exclusions and specific deposit timing rules. SARS says a deposit paid merely to secure the disposal before the agreement becomes unconditional is not withheld at that point, but the corresponding amount must be withheld from the first following payment. The effects of an error can depend on the exact agreement and payment timing.
This article is not a professional-liability opinion. Conveyancers, estate agents and purchasers should obtain legal advice on their statutory obligations, contractual protections and remedial steps in a real matter.
When to get tailored advice
Get immediate advice for any qualifying sale over R2 million with a potentially non-resident seller, a disputed residency position, an NR03 application, a trust or company seller, or a missed payment or filing step.