How Much Is Transfer Duty In South Africa

How Much Is Transfer Duty In South Africa

Welcome to my blog post! Today we will be discussing the important topic of transfer duty in South Africa. Purchasing a property is an exciting time but it's important to understand all the associated costs, and transfer duty is a significant one. Let's dive in and find out more about this topic.

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Table
  1. What Is Transfer Duty?
    1. How Is Transfer Duty Calculated?
  2. Are There Any Exemptions?
    1. When Is The Transfer Duty Due?
  3. In Conclusion

What Is Transfer Duty?

Transfer duty is a tax levied on the transfer of immovable property in South Africa. The duty is normally paid by the purchaser, and the amount payable is a percentage of the purchase price.

How Is Transfer Duty Calculated?

The transfer duty amount is calculated according to a scaled system based on the value of the property. Here is a breakdown of the current rates:

Property ValueRate
R0 – R1 000 0000%
R1 000 001 – R1 375 0003%
R1 375 001 – R1 925 000R11 250 + 6% of the value above R1 375 000
R1 925 001 – R2 475 000R44 250 + 8% of the value above R1 925 000
R2 475 001 – R11 000 000R88 250 + 11% of the value above R2 475 000
R11 000 001 and aboveR1 026 000 + 13% of the value exceeding R11 000 000

For example, if you are purchasing a property for R2 000 000, the transfer duty amount would be calculated as follows:

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  • R11 250 (from R1 375 001 to R1 925 000) +
  • R8 000 (from R1 925 001 to R2 000 000) =
  • R19 250
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Are There Any Exemptions?

First-time home buyers are eligible for an exemption on transfer duty for properties priced at R1 million or less. Additionally, properties that are transferred between siblings, spouses, and certain trusts are also exempt from transfer duty.

When Is The Transfer Duty Due?

The transfer duty amount is due and payable within six months of the date of acquisition.

In Conclusion

Transfer duty is an important factor to consider when purchasing a property in South Africa. Understanding the scaled system and any available exemptions can help you plan and budget for this significant cost. Speak to a qualified conveyancer or legal professional for more information on transfer duty and the property purchasing process.

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