When buying property, one of the most important upfront costs to understand is transfer duty.
Transfer duty can have a significant impact on your home-buying budget, yet many buyers only fully understand it late in the process. The good news is that it is a predictable cost, which means you can estimate it before you make an Offer to Purchase.
Here is a practical breakdown of what it is and how it is calculated.
What is transfer duty?
Transfer duty is a tax paid to the South African government when property is transferred from a seller to a buyer. It is administered by the South African Revenue Service (SARS) and generally applies to property transactions that are not subject to VAT.
In simple terms, if you buy from a private seller, transfer duty will usually apply. If you buy from a VAT vendor and VAT is charged on the transaction, transfer duty generally does not apply.
Who pays it?
The buyer is responsible for paying transfer duty. In most property transactions, the amount is paid to the conveyancer handling the transfer, who then submits the transfer duty declaration to SARS and arranges payment.
For properties acquired on or after 1 April 2025, no transfer duty is payable on a property value of up to R1 210 000.
What the conveyancer does
A conveyancer’s role is not limited to collecting the payment. The conveyancer typically handles the full SARS process, including:
- Calculating the correct transfer duty
- Submitting the transfer duty declaration to SARS
- Arranging payment to SARS
- Obtaining the transfer duty receipt
- Coordinating the transfer process with the Deeds Office
When is transfer duty payable?
Transfer duty must be paid to SARS within six months from the date of transaction. If it is not paid within that period, interest may be charged.
This is one reason buyers are usually asked to pay transfer duty well before registration. Without SARS clearance, the transfer cannot proceed normally through the registration process.
Some lenders may consider a higher loan, such as a 105% home loan, to help cover costs like transfer duty and bond registration costs, but this depends on the bank’s lending criteria and the buyer’s affordability profile.
Transfer duty rates
Transfer duty is charged on a sliding scale based on the value of the property. The following rates apply to properties acquired on or after 1 April 2025:
| Property value | Rate applied |
|---|---|
| R0 – R1 210 000 | 0% |
| R1 210 001 – R1 663 800 | 3% of the value above R1 210 000 |
| R1 663 801 – R2 329 300 | R13 614 + 6% of the value above R1 663 800 |
| R2 329 301 – R2 994 800 | R53 544 + 8% of the value above R2 329 300 |
| R2 994 801 – R13 310 000 | R106 784 + 11% of the value above R2 994 800 |
| R13 310 001 and above | R1 241 456 + 13% of the value above R13 310 000 |
How to calculate transfer duty
Let’s say you want to buy a property valued at R1 500 000.
Step 1: Deduct the duty-free threshold of R1 210 000.
R1 500 000 − R1 210 000 = R290 000
Step 2: Apply the 3% rate to the amount above the threshold.
R290 000 × 3% = R8 700
Your total transfer duty is therefore R8 700.
Timeframes to note
Transfer duty is not something to delay because it affects the transfer timeline. In practice:
- SARS may process transfer duty submissions within a few days, depending on whether anything further is requested
- The overall property transfer process often takes around 8 to 12 weeks, although this can vary
Exemptions from transfer duty
There are certain situations where transfer duty may not be payable. Common examples include:
- VAT transactions: If VAT is charged on the sale, transfer duty generally does not apply
- Divorce settlements: Certain property transfers between spouses following divorce may be exempt
- Deceased estates: Certain transfers to heirs or surviving spouses may qualify for exemption, depending on the circumstances
- Transfers between spouses: Certain transactions between spouses may qualify for exemption under the relevant rules
Advice for home buyers
It is best to budget for transfer duty before you start searching for a home, and separately from any deposit you may need to pay. Transfer duty is a once-off cost, but it is one of the most important upfront expenses in the property buying process.
If you would like to understand the broader costs involved in buying property, read our guide to the real costs of buying property.
