Selling a farm in South Africa: consent, land claims, water and VAT

Farm, smallholding or agricultural holding?

Start with the title deed: the rules differ.

• A farm or a farm portion is “agricultural land” under the Subdivision of Agricultural Land Act 70 of 1970 (SALA), unless an exclusion applies.
• An agricultural holding, a smallholding laid out under the Agricultural Holdings (Transvaal) Registration Act, 1919, is expressly excluded.
• Other exclusions cover listed pre-1994 local authority areas, townships, State land and land the Minister excludes by notice, but land that was agricultural immediately before a transitional council’s first election in the 1990s stays agricultural, even inside a municipality today.

Whether an exclusion applies is technical, and the Supreme Court of Appeal divided on it in Tridevco [2025] ZASCA 110, so have your conveyancer confirm before any portion is marketed. A subdivision also needs municipal approval, with SALA consent applied for as well where needed (SPLUMA, section 33).

The 1970 Act still applies: when you need consent

gov.za lists SALA as repealed, but it is still the law. The Subdivision of Agricultural Land Act Repeal Act 64 of 1998 only comes into operation on a date the President fixes by proclamation, and so does its intended successor, the Preservation and Development of Agricultural Land Act 39 of 2024 (section 39). As at 9 October 2026 we have found no proclamation for either Act.

Under section 3 of SALA, the Minister’s written consent is needed before:

• agricultural land is subdivided;
• any portion of it, surveyed or not, is sold or advertised for sale;
• a new undivided share in it vests in anyone, which can catch a sale of the whole farm to co-buyers;
• a portion is let for 10 years or more, counting renewals, or for life.

Registering a servitude needs consent too, with exceptions such as a right of way, pipeline or power line no wider than 15 metres (section 6A). Selling the whole farm as registered needs no section 3 consent, but check the title deed for conditions of an earlier consent, such as portions that may not be sold separately.

SALA defines a sale to include one subject to a suspensive condition, and in Geue v Van der Lith [2003] ZASCA 118 the Supreme Court of Appeal held a sale of a portion signed without consent void, even though it was made subject to consent. Until consent is granted on the owner’s application (section 4), the portion cannot lawfully be advertised or catalogued for auction.

Inherited farms are caught too: if consent for heirs to take portions or shares is refused, the executor must sell the land (section 5; see selling property from a deceased estate).

Land claims, occupiers and farm workers

Once the regional land claims commissioner is satisfied that a claim meets the requirements of section 11(1) of the Restitution of Land Rights Act 22 of 1994, notice of it is published in the Government Gazette and made known in the district. From then on, no one may sell, lease, subdivide, rezone or develop the land without giving the commissioner one month’s written notice, and a court may set aside a sale made without notice that was not in good faith. Nor may anyone remove or damage improvements on the land without the Chief Land Claims Commissioner’s written authority (sections 11(7)(aA) and (c), as substituted by Act 63 of 1997).

Claims lodged from 1 July 2014 and before 27 July 2016 remain valid, but cannot be processed until the claims lodged by 31 December 1998 are settled or referred to the court, or Parliament passes a new law (Commission statement, 8 September 2016), and that was still the position in August 2026 (written reply to question NW4493, as published by the Parliamentary Monitoring Group). Ask the regional land claims commissioner in writing, search the Gazette for the farm, and disclose what you find.

People who live and work on the farm

Workers and others living on the farm with the owner’s consent may be occupiers under the Extension of Security of Tenure Act 62 of 1997. Their rights bind the new owner (section 24(1)), a waiver of them is void unless the Act or a court order allows it (section 25(1)), and an occupier may be evicted only under a court order issued under the Act (section 9(1)). Do not clear the farm for a buyer yourself: take an attorney’s advice before giving any occupier notice.

The Land Reform (Labour Tenants) Act 3 of 1996 let labour tenants apply to acquire the land they occupy. New applications closed long ago (section 16(1)), but if the farm is sold while court proceedings on one are pending, the seller’s rights and obligations in them pass to the buyer (section 28(3)), so ask the Department of Land Reform and Rural Development whether any was lodged.

If the farming business itself passes to the buyer as a going concern (a labour law test, separate from the VAT one), section 197 of the Labour Relations Act moves the staff to the buyer unless a different arrangement is agreed as the Act allows. Speak to a labour attorney first.

Water: what passes with the land

A buyer will ask what water you hold under the National Water Act 36 of 1998, and the two common entitlements pass differently:

Registration is not entitlement, so give the buyer the licence or evidence of existing lawful use and proof of the water actually used, not only the registration certificate. The Department of Water and Sanitation records a new owner on form DW811, with a certified copy of the title deed (DWS registration guide, 1 September 2022).

Keeping or selling the water separately

Under section 25(2) a holder may surrender an entitlement to support someone else’s licence application, effective only if that licence is granted, and in Minister of Water and Sanitation v Lötter NO [2023] ZACC 9 (15 March 2023) the Constitutional Court found no clear prohibition of trading in water use entitlements.

The National Water Amendment Bill [B1-2026], before Parliament as at 9 October 2026 and not yet law, would prohibit that trading and limit a surrender to the holder’s own application for other land, so have your attorney check before you agree a separate water deal. Either way, agree in writing which water goes with the farm.

VAT, transfer duty and income tax

A property sale attracts VAT or transfer duty, never both (SARS), and who is selling decides which.

• The seller is not a VAT vendor: no VAT, and the purchaser is liable for transfer duty (see the transfer duty calculator).
• The seller is a vendor and the farm is part of its farming enterprise: VAT at the standard rate, currently 15% (SARS: VAT), in force since 1 April 2018 (SARS, 27 March 2018), unless the sale qualifies as a going concern.

The zero rate under section 11(1)(e) of the VAT Act needs both parties to be vendors and written agreement that the enterprise passes as a going concern at zero per cent (see the going concern guide). SARS says “the mere sale of a farm property” sells a capital asset, not the farming enterprise: the parties must agree that the farm’s income-earning activities, equipment, crops and other assets needed to farm will pass (Interpretation Note 57, 31 March 2010, para 4.8.1). If the farmhouse or workers’ housing is included, the whole price can be zero-rated where the farm was used mainly (more than 50%) for the enterprise. If not, only the going concern part can be, and the rest of the land and buildings carries VAT at the standard rate (paras 4.12.2 and 4.12.3).

For capital gains tax, an individual’s primary residence exclusion covers the house and up to two hectares used mainly for domestic or private purposes with it, sold at the same time to the same person (Eighth Schedule paragraph 46; SARS CGT guide, Issue 9, para 11.5), and only up to a capped gain (paragraph 45; see the SARS CGT rates page). If you are not resident, the purchaser may have to withhold part of the price for SARS (section 35A). Settle the price allocation, and how VAT applies to each part, with your tax practitioner and conveyancer before you sign.

Selling a game farm

Under the Game Theft Act 105 of 1991, whoever keeps game for commercial or hunting purposes on sufficiently enclosed land does not lose ownership if it escapes, and a provincial certificate, valid for three years, deems land sufficiently enclosed for the species named (section 2).

• Check the certificate. CapeNature says its certificate lapses when the land, or any part of it, is transferred or leased; elsewhere, ask the provincial conservation authority.
• Say in the agreement whether the game is included, and how and when it is counted.
• Allow time for permits. Possessing, moving, selling or buying a specimen of a listed threatened or protected species is a restricted activity that needs a permit (Biodiversity Act 10 of 2004, section 57(1)).

Selling to a buyer from outside South Africa

As at 9 October 2026 we have found no Act in operation that stops a foreign individual or a foreign-owned company from buying agricultural land here; the proposals to restrict it in 2015 and 2017 were never enacted. Have the buyer’s attorney confirm the position before signing.

Non-residents may freely invest in South Africa provided the deal is at arm’s length, at a fair market-related price and financed in an approved manner, such as foreign currency brought in through an authorised dealer (SARB Currency and Exchanges Manual, 5 October 2026, section G(C)(i)). See exchange control for foreign investors before setting the deposit and guarantee deadlines.

Auction or private treaty for a farm

We sell farms and agricultural holdings on auction anywhere in South Africa, from our office in Centurion (see property auctions), and by private treaty through Dynamic Real Estate. Past auctions include three rural properties on the Vaal River (August 2026) and a commercial egg farm’s equipment (September 2026): see our results.

• Auction gives a fixed date, roughly three to four weeks from a signed mandate, and competing bidders. Below the reserve you agree with us in advance, the farm does not sell. It suits estates and sellers who need a date. With a published land claim, give the commissioner the month’s written notice no later than signing the mandate, so it has run before auction day.
• Private treaty suits a buyer who needs a long due diligence or finance, or a staged handover of the farming operation.

The conditions of sale set the deposit, any buyer’s commission and the period to secure the balance. For a going concern, they should say what happens if the winning bidder is not a registered VAT vendor (SARS advises a clause adding VAT: Interpretation Note 57, para 4.3), and whether joint bidders are accepted, since a new undivided share needs consent. What selling costs (an appraisal fee, a listing fee and commission on the sale price) is set out in writing in the conditions of sale before you sign.

Implements and vehicles not needed to run the enterprise (in a going concern sale, those needed must go with the farm) can be sold through our movable assets auctions. For a written valuation of them, see our valuations page; for the farm itself we give you a price guide up front.

Documents a farm buyer will ask for

Several take weeks, so start early. To talk about your farm, get in touch.