Transfer duty is levied on the buyer when immovable property changes hands in South Africa, under the Transfer Duty Act 40 of 1949. For the 2024/2025 tax year, properties below R1.1 million attract no duty - above that threshold a sliding scale applies up to 13% on amounts above R12.1 million (SARS: Transfer Duty, 2024). Your conveyancing attorney calculates the duty, collects it from you, and pays it to SARS before lodging the transfer at the Deeds Office.
Key Takeaways
- Transfer duty is the buyer’s obligation - not the seller’s.
- Properties below R1.1 million are exempt (2024/2025 rates).
- Where the seller is a registered VAT vendor selling the property as part of a taxable enterprise, VAT applies instead of transfer duty - the two taxes are mutually exclusive.
- Inherited property and property transferred in a divorce settlement are exempt from transfer duty.
What triggers transfer duty
Transfer duty is levied on the acquisition of immovable property situated in South Africa (Transfer Duty Act 40 of 1949). This includes:
- Houses, flats, and sectional title units.
- Commercial property.
- Vacant land with or without improvements.
- Shares in a property-owning company or interests in a property-owning trust, in certain circumstances.
The duty is calculated on the purchase price or market value, whichever is higher. If you buy below market value - from a family member, for example - SARS may assess duty on the higher market value.
The transfer duty rate table (2024/2025)
| Property value | Rate |
|---|---|
| R0 to R1,100,000 | 0% (exempt) |
| R1,100,001 to R1,512,500 | 3% on value above R1,100,000 |
| R1,512,501 to R2,117,500 | R12,375 + 6% on value above R1,512,500 |
| R2,117,501 to R2,722,500 | R49,650 + 8% on value above R2,117,500 |
| R2,722,501 to R12,100,000 | R98,050 + 11% on value above R2,722,500 |
| Above R12,100,000 | R1,128,600 + 13% on value above R12,100,000 |
Verify the current rate table at sars.gov.za/individuals/transfer-duty/ before completing a transaction - thresholds are reviewed in annual budgets.
When VAT applies instead of transfer duty
Transfer duty and VAT are mutually exclusive on a property transaction (SARS: VAT). If the seller is a registered VAT vendor selling the property as part of their taxable enterprise - typically a property developer selling newly built homes - VAT at 15% applies and no transfer duty is payable.
Before signing any purchase agreement with a developer or property company:
- Confirm whether the purchase price is VAT-inclusive or VAT-exclusive.
- Confirm the seller is a registered VAT vendor and that the sale forms part of their taxable enterprise.
- If VAT applies, no transfer duty is payable - but you will effectively pay 15% VAT on the purchase price.
Buying from a private individual who is not a VAT vendor: transfer duty applies.
Who pays transfer duty and when
Transfer duty is the buyer’s obligation. Your conveyancing attorney calculates the duty and collects the funds from you. The duty must be paid within six months of the transaction date - typically taken as the date the sale agreement was signed. Late payment attracts interest at 10% per annum from the due date (SARS: Transfer Duty).
Your attorney submits the transfer duty declaration and payment to SARS electronically. Before the transfer can be registered at the Deeds Office, SARS must issue a receipt confirming payment.
Exemptions from transfer duty
Certain transactions are exempt (Transfer Duty Act 40 of 1949):
- Transactions already subject to VAT (seller is a VAT vendor in the normal course of enterprise).
- Divorce: property transferred between spouses under a court order in a divorce settlement.
- Inheritance: property acquired through a deceased estate by an heir or legatee.
- Certain government entity transactions.
- Property cancelled and retransferred within a set period where a refund applies.
Total cost of a property purchase
Transfer duty is one of several transaction costs. Budget for:
- Transfer duty (calculated on the purchase price or market value).
- Conveyancing fees (attorney’s fees for the transfer, regulated by a tariff).
- Bond registration costs if you are taking out a home loan.
- Rates and levy adjustments (amounts owing to the municipality or body corporate are adjusted between buyer and seller at transfer).
- Home inspection and compliance certificate costs.
Frequently Asked Questions
Who pays transfer duty - the buyer or the seller?
Transfer duty is the buyer’s obligation. Your conveyancing attorney calculates the duty based on the purchase price or market value (whichever is higher), collects the funds from you, and pays it to SARS. The seller has no transfer duty liability on a standard sale.
When does VAT apply instead of transfer duty on a property purchase?
If the seller is a registered VAT vendor and the property is sold as part of their taxable enterprise - most commonly a developer selling new homes - VAT at 15% applies and no transfer duty is payable. If you are buying from a private individual who is not a VAT vendor, transfer duty applies. Confirm the VAT status with your conveyancing attorney before signing, since the cost difference is significant.
Is transfer duty payable on property received as an inheritance?
No. Property acquired through a deceased estate as an heir or legatee is exempt from transfer duty. The exemption applies to property inherited under a will or intestate succession. Executor fees, legal costs, and estate duty may still apply, but SARS does not charge transfer duty on the inheritance transfer itself.
How quickly must transfer duty be paid after a property is sold?
Transfer duty must be paid within six months of the transaction date. Late payment attracts interest at 10% per annum. Your conveyancing attorney manages the calculation and payment timeline - confirm the expected dates at the start of the transfer process.
Sources
- SARS: Transfer Duty - current rate table, payment process, exemptions, and eFiling submission
- Transfer Duty Act 40 of 1949 - the legislative basis for transfer duty in South Africa
- SARS: VAT and Property - when VAT applies to property transactions instead of transfer duty
Related guides
- Capital Gains Tax in South Africa: What It Is and How It Works
- Estate Duty in South Africa: What Happens to Your Estate When You Die
- How to Register for VAT in South Africa: A Step-by-Step Guide
This guide is for general educational purposes. Transfer duty rates and exemptions can change annually - verify the current rate table and your specific transaction rules with your conveyancing attorney or SARS before completing a property purchase.