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Transfer fees vs transfer duty: Homebuying costs explained

There are additional costs to purchasing a home above and beyond the repayments on the home loan. These include transfer costs and transfer duty. Find out more.

Transfer fees vs Transfer duty

Article summary

  • Transfer costs are paid to a conveyancing attorney for the transfer of property, while transfer duty is a tax paid to SARS.
  • Transfer costs and transfer duty depend on the purchase price of the property.
  • Properties worth less than R1 100 000 are exempt from transfer duty.
  • See below for how to calculate your transfer costs and transfer duty.

Homebuyers need to be aware of the additional costs of purchasing a home. These are costs above and beyond the monthly repayments and interest on the home loan.

These additional costs include transfer costs and transfer duty. Here’s what you need to know.

Note: If you want to factor additional costs into your budget, you can use our Transfer Cost Calculator to determine bond registration, transfer fees, and transfer duty.

Transfer fees vs transfer duty

  • Transfer fees are paid to the conveyancing attorney who transfers the bond to your name. The conveyancing attorney is hired by the seller but paid by the buyer.
  • Transfer duty is a tax on the transfer costs paid to SARS. Properties worth less than R1 100 000 are exempt from transfer duty. Transfer duty is handled by the conveyancing attorney.

How much are transfer fees?

Transfer fees are based on the purchase price of the property. The higher the purchase price, the higher the transfer fees.

How much is transfer duty?

Transfer duty is also based on the purchase price of the property, but starts at R1 100 000.

See the chart below for more details.

Value of property (R) Rate
0 – 1 100 000 No transfer duty
R1 100 001 — 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

When does the transfer of property take place?

The transfer takes place after the home loan has been approved.

When do I pay transfer fees?

Transfer costs need to be paid to the conveyancing attorney before the transfer of property takes place, which is usually within three months of the home loan being approved.

When do I pay transfer duty?

Transfer duty must be paid within six months of the transfer of the property.

Exemption from transfer duty

Aside from the property being worth less than R1 100 000, there are other conditions under which you are exempt from transfer duty. For example:

  • 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 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.
  • Cancelled transactions. If a property purchase is cancelled 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.

Can transfer costs be included in the home loan?

There is the option of a 105% home loan. This incorporates the deposit, transfer costs and transfer duty.

It requires higher monthly repayments and interest rates but removes a major barrier for many first-time homebuyers.

Securing a 105% home loan will require a good credit record as the bank is taking a big risk. A minimum credit record of 610+ is required, while 661+ is considered a good credit score.

Save on the home loan

Getting the best possible deal on your home loan will leave you with more funds to set aside for additional costs.

You can get the best deal by applying to multiple banks. You can do this with ooba Home Loans. We submit your application to multiple banks and allow you to compare deals.

This also gives you a better chance of qualifying for special deals such as the 105% home loan.

So apply with ooba Home Loans to get the best deal on your home loan

Get a free home loan comparison.

Multiple quotes from the big banks to compare.

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Ooba home loans services are simply the best. My Consultant Bianca Dancer was so hands on and helpful from the get go. She guided me through the entire process and put me at ease being a first time buyer. I highly recommend their services.

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Jay Govender and Maleshini Reddy from OOBA provided outstanding assistance and guidance in securing our home loan. Response times were excellent and they were professional and friendly.

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Estelle Vorster was really helpful in securing the best deal for my home loan, she not only negotiated a lower interest rate she went as far as securing 50% discount on the transfer costs.

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