Transferring an existing house into a trust is a formal property transfer and should be handled by a conveyancing attorney with tax advice. The trust should first be properly established, its trustees must hold valid Letters of Authority from the Master of the High Court, and the trust should be correctly registered with SARS before the transaction is implemented.

The property can be transferred by sale or donation. In either case, the transfer is generally a disposal for capital gains tax purposes. The trust’s acquisition of the property may also attract transfer duty unless the transaction is subject to VAT or a specific statutory exemption applies. If the property is donated, donations tax may also arise. For the 2027 tax year, which runs from 1 March 2026 to 28 February 2027, the first R150,000 of property donated in a tax year by a natural person is exempt from donations tax, subject to the other exemptions and rules in the Income Tax Act.

If the trust buys the property from you but leaves the purchase price outstanding on loan account, section 7C should be considered where the loan is interest-free or bears interest below the statutory official rate.

Primary residence capital gains tax treatment is also important. For the 2027 tax year, the primary residence exclusion is R3 million. An individual seller may qualify for that exclusion on the transfer to the trust if the statutory requirements are met. Once an ordinary family trust owns the property, however, it does not qualify for the primary residence exclusion, although a qualifying special trust can receive specific CGT relief in appropriate circumstances. The full tax and cash flow effect should be modelled before the transfer is signed.

Current donations tax, capital gains tax and transfer duty thresholds should be checked on the SARS website at the time of the transaction.

See also: What is the best trust to put your house in? | What assets can a family trust hold? | What are the disadvantages of a trust in South Africa?

Disclaimer: The information provided here is intended as general guidance only and does not constitute legal, tax, or financial advice. Every situation is unique, and legislation is subject to change. We invite you to reach out to our team at Wealth and Legacy Group for guidance tailored to your specific circumstances.