Property & Housing

Transfer Duty

Transfer duty is a government tax payable when buying property. It is calculated on a sliding scale based on property value and must be paid before transfer can be registered.

Legal Definition

A tax levied under the Transfer Duty Act 40 of 1949 on the acquisition of immovable property. Calculated on a progressive scale: properties up to R1 100 000 — 0%; R1 100 001 – R1 512 500 — 3%; R1 512 501 – R2 117 500 — 6%; over R2 117 500 — increasing rates up to 13%. Must be paid to SARS before the Deeds Office will register transfer.

📖 Constitutional / Statutory Basis: Section 25, Constitution of the Republic of South Africa, 1996; Transfer Duty Act 40 of 1949

Practical Example

You buy a house for R2 000 000. Transfer duty is calculated by the conveyancer, paid to SARS, and SARS issues a receipt (TD letter). The Deeds Office only registers after this.

Frequently Asked Questions

Who pays transfer duty?

The purchaser (buyer), unless the agreement provides otherwise. Transfer duty is in addition to the purchase price.

Are there exemptions from transfer duty?

Yes. VAT-registered sellers charge VAT instead of transfer duty. First-time home buyers on government subsidy schemes may be exempt.

What happens if I don't pay transfer duty?

Transfer cannot be registered. SARS can also issue an assessment for unpaid transfer duty with penalties and interest.

Related Terms

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