Transfer duty in 2023: What buying a home will cost you

Article summary

• Transfer duty is not to be confused with the transfer of property cost; the latter is a fee paid to the attorney who transfers the property from the seller to the buyer, while the former is a tax payable to SARS.
• Transfer duty is only required on properties valued at more than R1 100 000.
• Certain conditions exempt you from transfer duty, such as acquiring a property through marriage in community of property.

Transfer duty is an additional cost that needs to be incorporated into your budget planning when purchasing a property.

It is not to be confused with ‘transfer of property’ costs. This is a fee paid to the conveyancing attorney who transfers the property from the seller to the buyer, whereas transfer duty is a tax paid to SARS on the transfer of property.

Transfer duty is only payable on properties worth more than R1 100 000 (an increase from the previous R1 000 000).

You can use our Transfer Cost Calculator to determine how much transfer duty you will owe on a property

What else should you know about transfer duty?

How much will I pay on transfer duty?

These are the transfer duty rates applicable on property, as of March 2022 to February 2023.

Value of property (R)	Rate
0 – 1 100 000	No transfer duty
R1 100 000 — R1 512 500	3% of the value above R1 100 000
R1 512 501 – R2 117 500	R12 375 + 6% of the value above R1 512 500
R2 117 501 – R2 722 500	R48 675 + 8% of the value above R2 117 500
R2 722 501 – R12 100 000	R97 075 + 11% of the value above R2 722 500
R12 100 001 and above	R1 128 600 + 13% of the value above R12 100 000

Who takes care of my transfer duty payments?

A conveyancing attorney, responsible for the transfer of the property to your ownership, will handle transfer duty payments on your behalf.

The seller usually appoints the conveyancing attorney but their cost is covered by the purchaser.

When should the transfer duty be paid?

Transfer duty is payable within six months of the date of acquisition. Failure to do so will result in penalties.

Under what conditions will I be exempt from transfer duty?

Property transfers are exempt from transfer duty in the following circumstances:

• Marriage in community of property. If someone who owns a property gets married in community of property, his or her spouse will automatically become the owner of a half-share of the property, without paying any transfer duty.
• Divorce. Transfer duty does not apply if a property is awarded to a spouse in terms of a divorce order. The exemption applies to all marital regimes and to civil unions. However, if the property is not awarded to a spouse in terms of a divorce order and the parties reach an agreement outside of the formal divorce proceedings, the spouse who acquires the property will be liable for transfer duty.
• Inheritance. Heirs and beneficiaries are exempt from paying transfer duty on property inherited from a deceased estate, regardless of the nature of their relationship with the deceased and irrespective of whether or not the deceased died without a valid will.
• Canceled transactions. If a property purchase is canceled before the transfer is registered at the Deeds Office, there is no liability for transfer duty if SARS is satisfied that the cancellation is legitimate.

Note By law, a transaction cannot be subject to both VAT and transfer duty, and, in a property transaction, the payment of VAT always takes precedence over that of transfer duty where the seller is a VAT vendor.

Check if the seller is registered for VAT. If so, then VAT will be payable on the property purchase, not transfer duty.

Developers often use this marketing ploy to entice prospective buyers, offering homes with no transfer duty. Instead, buyers pay VAT on these homes, but this is more often than not included in the purchase price.