Minister of Justice and Correctional Services
Minister Ronald Lamola, MP
316 Thabo Sehume Street (c/o Thabo Sehume and Francis Baard Streets)
28 April 2020
Appeal to raise the amounts for the purposes of Section 18(3) of the Administration of Estates Act, 1965 (Act no. 66 of 1965)
As a group of concerned civil society organisations working closely with some of the most marginalised communities in South Africa, we urgently appeal to you to increase the threshold for “Section 18(3) Estates”. The threshold was last raised to its current level of R250,000 in 2014 (Government Gazette no. 38238) and has therefore not been adjusted to compensate for property price inflation and other market related factors that have served to increase the value of properties. This prejudices heirs, many of whom subsist on low incomes and who, under the present dispensation, suffer the disadvantage of having the meagre estate eroded by the cost of an executor. In the current economic context that has emerged as a result of the Covid-19 pandemic, not being able to formally regularise their title undermines the economic resilience of precisely those who we would wish to see home ownership support.
At its current level of R250 000, the Estates threshold creates two main problems. First, the costs associated with transferring a property that falls outside of the threshold are significant. While heirs who wish to sell inherited properties can use the proceeds of a sale to fund legal fees, those who wish to retain the asset may not have the money available, and will be unable to formalise ownership. This leaves them in a most invidious situation because they are unable to utilise their most valuable asset to its full potential. Second, the inability to formalise ownership then leaves the property in a state of administrative flux, unable to be formally sold, or used to leverage credit, or be taxed or billed against because officially at least, there is no “owner”.