If you’re buying property in South Africa, one of the biggest costs you’ll encounter — aside from the purchase price — is transfer duty. Many first-time homebuyers are caught off guard by this expense, which can run into hundreds of thousands of rands on higher-value properties. Here’s everything you need to know.
What is Transfer Duty?
Transfer duty is a government tax levied on the acquisition of property (immovable property) in South Africa. It is governed by the Transfer Duty Act 40 of 1949 and is administered by SARS (South African Revenue Service).
Transfer duty is paid by the buyer (the transferee) and is calculated on the purchase price or the fair market value of the property — whichever is higher. SARS takes a dim view of undervaluation, so declarations must reflect the true transaction value.
Current Transfer Duty Rates in South Africa (2025/2026)
Transfer duty is calculated on a sliding scale. The current rates are:
- R0 – R1,100,000: 0% (no transfer duty)
- R1,100,001 – R1,512,500: 3% on the value above R1,100,000
- R1,512,501 – R2,117,500: R12,375 + 6% on the value above R1,512,500
- R2,117,501 – R2,722,500: R48,675 + 8% on the value above R2,117,500
- R2,722,501 – R12,100,000: R97,075 + 11% on the value above R2,722,500
- R12,100,001 and above: R1,128,600 + 13% on the value above R12,100,000
Example: On a property purchased for R2,000,000, the transfer duty would be R12,375 + 6% of (R2,000,000 – R1,512,500) = R12,375 + R29,250 = R41,625.
When is Transfer Duty NOT Payable?
Transfer duty is not payable in the following circumstances:
- VAT properties: If the seller is a VAT-registered vendor and the property forms part of their business enterprise (e.g., a developer selling a new home), the transaction attracts VAT (15%) instead of transfer duty. You cannot pay both.
- Properties below the threshold: No transfer duty on properties priced at R1,100,000 or less.
- Certain transactions: Transfers between spouses under a court order, transfers as part of a corporate restructuring, and other specific exemptions under Section 9 of the Transfer Duty Act.
Your conveyancing attorney will advise whether your purchase attracts transfer duty or VAT and calculate the exact amount payable.
When Must Transfer Duty Be Paid?
Transfer duty must be paid to SARS within 6 months of the date of the transaction (the date the sale agreement was signed). If paid after 6 months, interest and penalties apply.
In practice, your conveyancing attorney handles the transfer duty payment as part of the transfer process. They calculate the amount, collect it from the buyer, and submit it to SARS. SARS issues a transfer duty receipt (or exemption certificate), which is a prerequisite for registration at the Deeds Office.
For buyers in Pretoria, conveyancing attorneys in Pretoria are experienced in managing the SARS payment process efficiently to avoid delays in the transfer.
Other Costs Homebuyers Should Budget For
Beyond transfer duty, buyers should budget for:
- Conveyancing attorney fees (regulated by the Legal Practice Council tariff guidelines)
- Bond registration costs (if financing with a home loan)
- Deeds Office fees
- Rates and levy clearance fees
- Home inspection costs
On a R3,000,000 property, total transaction costs (transfer duty + conveyancing + bond registration) can easily exceed R200,000. Budget carefully and ask your attorney for a detailed cost estimate upfront.
Frequently Asked Questions
Who pays transfer duty in South Africa — buyer or seller?
The buyer pays transfer duty in South Africa. It is calculated on the purchase price (or market value, whichever is higher) and must be paid to SARS within 6 months of the transaction date.
Is transfer duty the same as stamp duty in South Africa?
Stamp duty was abolished in South Africa in 2009. Transfer duty replaced it as the primary property transaction tax. They are not the same — transfer duty is the current applicable tax.
Can transfer duty be financed as part of the home loan?
Some banks allow transfer duty and other transaction costs to be financed as part of the bond (100% plus costs bonds). However, this results in a larger bond and higher monthly repayments. It is generally more financially prudent to pay transfer duty from savings.
What if SARS disputes my property valuation for transfer duty?
SARS can query the declared value if it appears to be below market value. They may request supporting documentation (e.g., a valuation report). If you paid a genuine arm’s length market price, your conveyancing attorney can assist in responding to SARS.
Is transfer duty payable on auction purchases?
Yes. Transfer duty is payable on all property acquisitions, including those at auction. The buyer at auction is responsible for transfer duty on the hammer price.
Get Expert Conveyancing Help
Understanding all the costs involved in a property purchase — including transfer duty — is essential to budgeting correctly and avoiding nasty surprises. Our directory connects you with expert conveyancing attorneys in Johannesburg and across South Africa who will give you a full cost breakdown before you commit to a purchase.