What is the meaning of transfer duty?
Transfer duty is the tax associated with the transfer of property. This tax is remitted to SARS and is contingent on the property's assessed value. Properties valued under R1,100,000 are exempt from this tax.
Here's a more detailed breakdown of the
rates for transfer duty from March 1, 2023, to February 29, 2024:
- For properties valued under R1,100,000, there is a 0% transfer duty rate.
- Properties valued between R1,100,001 and R1,512,500 incur a 3% tax on the portion above R1,100,000.
- Properties valued between R1,512,501 and R2,117,500 are subject to a flat fee of R12,375 plus 6% on the amount exceeding R1,512,500.
- Properties valued between R2,117,501 and R2,722,500 have a fixed fee of R48,675 plus 8% on the portion above R2,117,500.
- For properties valued between R2,722,501 and R12,100,000, there's a fixed fee of R97,075 plus 11% on the amount exceeding R2,722,500.
- Properties valued at R12,100,001 and above are charged R1,128,600 plus 13% on the excess over R12,100,000.
You can use an online Transfer Cost Calculator to determine your transfer duty, along with other costs like transfer and bond registration expenses. It's essential to be aware of the additional expenses associated with buying a home, which include transfer duty, transfer costs, and bond registration. Note that transfer duty is paid to SARS, while transfer costs are paid to the conveyancing attorney responsible for the property transfer.
Before purchasing a home, it's advisable to ascertain your eligibility for a home loan by getting prequalified. This enables you to budget effectively and estimate the price range for your property purchase, including transfer costs.
Who is responsible for paying transfer fees when acquiring a property?
The buyer of the property bears the responsibility for paying transfer costs. These costs are paid to a conveyancing attorney appointed by the property seller. Transfer costs are one of the additional expenses incurred by the buyer, which also encompass bond registration expenses, rates, levies, and insurance.
When should transfer costs be paid?
Transfer costs must be settled with the conveyancing attorney prior to the property transfer, typically within three months of the home loan approval. The exact amount of transfer costs is contingent on the property's value, with higher-value properties incurring higher transfer costs.
It's important to note that transfer duty is distinct from transfer costs. Transfer duty is a tax imposed on property transfers (except for properties valued below R1,100,000) and must be remitted to SARS within six months of the transfer.