Changing the bond holder
In 2012 my wife and father–in-law purchased a house on bond to the value of 1.2 million rand. My father–in-law only assisted in the procurement of the bond, while the repayment was the sole responsibility of my wife. Later this year my wife requested me to substitute her father so that the two of us could be joint bond holders. We approached an estate agent who advised that my father-in-law will be liable for tax if we go ahead with this plan since the value of the property had gone up to 1.7 million rand. In case of a substitution bond like this, will he be liable for tax, and why? The outstanding balance of the bond is now 960 000 rand.
On the title deed I presume your father-in-law is stated as a 50% owner of the property. In that case if you want to take over that ownership, he would need to sell you his 50% ownership. This will be done by a sale of immoveable property agreement. Any such sale will attract taxes. The bank or a tax expert will help you to calculate the tax payable.