For most South Africans, a home is a significant investment – often the cornerstone of a life’s work. Despite years of observing market trends and monitoring bond rates, people often fail to give their property a dedicated, strategic space in our long-term estate planning.

Simply “holding” a property is not enough in today’s volatile economy, which calls for homeowners to plan ahead to ensure a property transitions seamlessly to the next generation without becoming a financial or legal burden. “This is a move that calls, first and foremost, for a shift in perspective from passive ownership to active asset management,” says Skoko Sebola, Principal at Leapfrog Midrand. 

Estate planning is more than a title deed 

Integrating real estate into a legal will is not just about naming a beneficiary – it’s about clearing the path for a clean transfer of wealth. First and foremost, a clear, professionally drafted will serves to ensure that a property does not become trapped in protracted probate delays. “This is something you want to avoid at all costs as it can, as it too often does, lead to family disputes or the forced sale of the asset to cover unexpected costs,” Sebola explains.

He adds that many homeowners assume that leaving a house to their children is a straightforward gift. But if you haven’t accounted for the liquidity needed to cover Capital Gains Tax (CGT), estate duties and conveyancing fees, you might be leaving behind a debt rather than a legacy.

Unlocking value 

Even before making provision for a property in a will, it pays to conduct a life-stage audit to assess how the property might better serve your current needs. A property that once served a growing family may be an underutilised asset in later life. 

“Large family homes in Midrand and surrounding hubs, for example, often become underutilised once children move out. Maintaining a five-bedroom house when you only use two is a drain on your monthly cash flow through rates, taxes and maintenance,” Sebola explains as a means of illustrating a scenario in which holding a property passively can actually erode the value of the legacy you intend to leave.

There is a growing shift where homeowners are thinking more strategically earlier on about how to best unlock the value of a property.”By downscaling or relocating to a more manageable lifestyle estate while you are still active, you can take the surplus capital and reinvest it into more liquid assets or even a smaller, high-yield buy-to-let property that is easier for heirs to manage or sell later on,” Sebola notes. 

The ‘admin’ 

When incorporating property into your will, there are several considerations that ultimately protect the property and your loved ones. 

In the first instance, The Right of Inhabitation (Habitatio) is a tool to leverage if you wish to leave the ownership of the property to your children but ensure that a surviving spouse or a long-term partner has the legal right to live in the home for the duration of their life. 

Capital Gains Tax (CGT) is a significant consideration and triggered upon death as a “deemed disposal”. Sebola strongly advises property owners to consult a professional and registered financial advisor to plan for the tax implications around the property in your estate. “One of the key reasons to do this is to ensure the property doesn’t have to be sold to pay the taxman,” Sebola says. 

A key part of getting the admin in order is getting a professional evaluation done on the property. “A current, market-related evaluation allows you to see the true weight of the asset and decide how to best move forward with the property. Most trusted property advisors would be happy to offer a evaluation free of charge,” Sebola adds. 

Active management 

A property is an asset that needs to be actively managed, and not just when it comes to drawing up a will. To this end, make sure to review your will annually to ensure it reflects your current property portfolio and wishes around its legacy beyond your lifetime. 

It is best practice to ensure your estate has enough liquidity to cover taxes and fees. At the same time, “audit for utility” regularly to assess if the home is too big or the maintenance is too high, and consider unlocking that equity now.

A person’s legacy isn’t in a property itself, but in the financial security that house provides for those left behind. Ensuring the property has a clear and dedicated space in your will is how to turn an asset into a lasting foundation.