Answer to a question from a reader

Can a title deed be transferred to a child?

The short answer

Yes, if the child is between the ages of 7 and 18, and a parent or guardian is there to help.

The whole question

Dear Athalie

If the owner of an RDP house gets married and moves out, can they transfer the property deed to their 15-year-old sister who is living there?

The long answer

Yes, the title deed can be transferred to the registered owner’s 15-year-old sister. 

A minor child below the age of seven is not able to sign anything, but a minor child between the ages of seven and eighteen can sign a document with the help of their parents or guardian, or the parents or guardian can sign on the minor child’s behalf. 

Although the property belongs to the child when it is transferred to the child, it must be administered by the parent or guardian until the child turns 18. A child below the age of 18 has no legal capacity to sell the property, and the property also cannot be sold by the parent or guardian without the permission of the Master of the High Court if the value of the property is below R250,000. If it’s above R250,000, permission has to be given by the High Court itself. This is to protect the best interests of the minor child. The Master will want to know why the parent or guardian wishes to sell the house and, if the proceeds from the sale are not going to be used to buy another property, the Master will order the proceeds of the sale to be put into the Guardian’s Fund, which can be claimed by the child when it is 18.

With regard to RDP houses specifically, the owner must have owned the RDP house for more than eight years before transferring it. Section 10(a) and 10(b) of the Housing Act 107 of 1997 says that the owner of an RDP house has to get permission from the Director-General of Human Settlements before a transfer can be made. 

A special lawyer, called a conveyancer, does the work of getting the title deed transferred by the Deeds Office, and one of the documents that the conveyancer will need to give to the Deeds Office is a letter confirming that the Human Settlements Department has no objection to the transfer. The child becomes the owner of the property when the Registrar of Deeds signs the transfer. After it’s been signed, a copy is kept at the nearest Deeds Office. 

The owner who gives or donates the house to a family member has to pay a donations tax to SARS of 20% of the value of the property, but if the house is worth less than R100,000 this donation tax will not apply. (In the case of a house that is valued at more than R100,000, the person donating the house is entitled to a tax exemption for the first R100,000 but will have to pay the donations tax on the remaining value of the house.) 

For this reason – the high donations tax – many people prefer to leave their property to their heirs in their wills, as donations tax does not apply. But if the donations tax does not apply in this case, the owner can donate and transfer her house to her 15-year-old sister.

Wishing you the best,

Answered on April 5, 2022, 12:12 p.m.

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Please note. We are not lawyers or financial advisors. We do our best to make the answers accurate, but we cannot accept any legal liability if there are errors.