What is a Transfer Duty?

Article Provided by Leanne Jooste, B Law Inc. Attorneys

Transfer Duty is a tax levied on the value of any property acquired by any person by way of a transaction or in any other way. This includes any land and fixtures and includes real rights in land, rights to minerals, a share or interest in a "residential property company" or a share in a share-block company.

These are the Transfer Duty rates applied to properties acquired on or after 1 March 2020, and apply to all persons (including Companies, Close Corporations, and Trusts):

Value of the property (R)                                    Rate
R1 - 1 000 000                                                      0%
R1 000 001 - R1 375 000                                     3% of the value above R1 000 000
R1 375 001 - R1 925 000                                     R11 250 + 6% of the value above R 1 375 000
R1 925 001 - R2 475 000                                     R44 250 + 8% of the value above R 1 925 000
R2 475 001 - R11 000 000                                   R88 250 +11% of the value above R2 475 000
R11 000 001 and above                                       R1 026 000 + 13% of the value exceeding R11 000 000

When should it be paid?

Transfer Duty is payable within six (6) months from the date of purchase. If the Transfer Duty is not paid within this period, interest is calculated at 10% per annum for each completed month. A completed month is calculated as the first day from the expiry of the interest-free 6-month period to the date of payment.

Remember that in the case of conditional sales the period of 6 months commences from the date on which the transaction was entered into (i.e., the last date of party signature to the agreement), and not the date when the contract becomes binding upon the parties (i.e., the date the conditions are fulfilled.)

De Lucia Group has been servicing the property industry for over 45 years. Contact us to ensure you get the best advice for all your property-related queries. Michael De Lucia - michaeldl@delucia.co.za