Transfer Duty in South Africa – What You can Expect to Pay | Legal Articles


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Transfer Duty in South Africa – What You can Expect to Pay

When it comes to transfer duty in South Africa, it’s important for you to understand what you can expect to pay when purchasing property in South Africa.

The legislation that governs transfer duty in South Africa is known as the Transfer Duty Act and it provides the definition for transfer duty.

transfer duty in south africa

What is Transfer Duty in South Africa?

According to the act, transfer duty is the tax payable by buyers of all types of properties and is an amount owned over and above the selling price of the property.

What are Transfer Costs?

Any person who is purchasing property in South Africa must understand that there is a difference between transfer costs and transfer duty.

Transfer costs are all the expenses related to transferring the property into the buyer’s name and include the cost of registering a bond as well as the conveyancing fees.

Who Pays Transfer Duty in South Africa and When?

Any person who purchases and acquires a home or property is liable to pay transfer duty. The date of acquisition is the date on which the transaction was entered into which is also the date on which the final contracting party signed the agreement.

How is Transfer Duty Calculated?

This is an important question. Transfer duty is calculated according to the value of the property and not the selling price.

The South African Revenue Service typically considers the price of the property to be its market value. However. if SARS believes that the property was sold for less than its market value, then transfer duty will be calculated according to the value and not the purchasing price.

Transfer Duty Exemptions

The following are circumstances under which transfer duty will not be payable:

  • Divorce

If a property is awarded to a spouse in terms of a divorce order, transfer duty will not be payable by that spouse. This exemption applies to all marital regimes as well as to civil unions in South Africa

  • Inheritance

Beneficiaries and heirs who inherit property from deceased estate are exempt from paying transfer duty for the inherited property

  • Marriage in Community of Property

Spouses who get married in community of property to someone who already owns a property will not pay transfer duty in order to obtain their portion of the shared estate in the form of immovable property

  • Cancelled Transactions

In the event of a purchase being cancelled before the transfer has been registered at the Deeds Office and SARS deems the cancellation as legitimate, the buyer will be exempt from paying transfer duty

Van Deventer & Van Deventer Incorporated – Conveyancing Attorneys South Africa

Transfer duty in South Africa refers to the tax payable by any individual who is purchasing property. However, it’s important to understand the difference between transfer duty and transfer costs.

For assistance with matters related to property transfers, or to find out what legal services we offer related to property, please contact us.

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