Can a minor own immovable property?

June 2023 - By Kelsey Nurse

Who is considered a minor and what is their capacity to contract?

In terms of the Children’s Act, No. 38 of 2005, a minor is defined as a person under the age of 18 years. In South Africa a minor may not enter into a contract without the consent of a legal guardian or parent.

Minors 7 and under have no contractual capacity and therefore cannot enter into a legally binding contract, both parents or the legal guardian would have to sign the contract for the sale or purchase of land on his/her behalf. Minors over 7 and under 18 years have limited contractual capacity and have to be assisted by both parents of a legal guardian when buying or selling land.

In terms of a sale of land it is important to take note however, that the parents/guardian would need to have the consent of the Master in terms of the Administration of Estates Act, 66 or 1965 which states that “no natural guardian shall alienate or mortgage any immovable property belonging to his/her minor child, unless so authorised thereto by the Court (value exceeding R 250 000.00) or by the Master (value not exceeding R 250 000.00)”. It is therefore the Masters discretion to approve or decline the sale/purchase while having regard to the minors’ best interests. The procedure for obtaining consent is found in Section 80(2) of the Administration of Estates Act, 66 or 1965, the Act states that the Master may authorise a sale if the value of the immovable property registered in the minor child’s name does not exceed the amount of R250 000.00. If the value of the property exceeds R250 000.00, the natural or legal guardian should apply to the High Court for consent to sell the immoveable property.

What are the different ways of transferring property to a minor?

• Donation
A minor may be donated property by a parent/guardian/grandparent/person and when property is donated, a donation tax of 20% is payable by the parents/guardian to SARS on the value of the property with the annual exception of the first R100 000 being exempt from donation tax.
• Inheritance
A minor may be bequeathed property in terms of a Last Will and testament, this property will then be transferred and registered into the name of the minor. It is important to consider any estate duty tax involved for any property bequeathed to a minor.
Bequeathed property is exempt from Transfer Duty tax.
• Purchase
If property is being purchased in the name of a minor the necessary consents are applicable that being minors 7 and under require both parents or the legal guardian would have to sign all documents necessary for purchase of land on his/her behalf and minors over 7 and under 18 years have limited contractual capacity and have to be assisted by both parents of a legal guardian when buying land.

Who pays the costs involved?

• Donation – The parents/ guardian is responsible for paying the donation tax.
• Inheritance – Provided the property was bequeathed to the minor usually these costs are included in the claims against the estate and thus is covered by the estate provided the estate has funds available for this.
• Purchase – When property is purchased in the name of a minor there will be Transfer Costs involved, these will need to be covered by the minor should funds be available, or by the parent of guardian. Most of the time the purchase price is cash or by arrangement with the seller by the parents/guardian.