Transfer duty is a tax payable to SARS when you buy property in South Africa. Understanding how it works and whether you qualify for exemptions can save you thousands of rands.
What is Transfer Duty?
Transfer duty is a tax levied by the South African Revenue Service (SARS) on the transfer of property from one person to another. It's calculated as a percentage of the purchase price and is payable by the buyer.
Key Points About Transfer Duty:
- Payable by the buyer, not the seller
- Based on the purchase price or market value (whichever is higher)
- Must be paid before the property can be transferred
- First-time buyers may qualify for exemptions
- Different rates apply for natural persons vs companies
2025 Transfer Duty Rates
Transfer duty is calculated on a sliding scale. Here are the current rates for natural persons (individuals):
| Property Value | Transfer Duty Rate | Calculation |
|---|---|---|
| R0 – R1,100,000 | 0% | Exempt (R0) |
| R1,100,001 – R1,512,500 | 3% | 3% on value above R1,100,000 |
| R1,512,501 – R2,117,500 | 6% | R12,375 + 6% on value above R1,512,500 |
| R2,117,501 – R2,722,500 | 8% | R48,675 + 8% on value above R2,117,500 |
| R2,722,501 – R12,945,000 | 11% | R97,075 + 11% on value above R2,722,500 |
| R12,945,001+ | 13% | R1,221,550 + 13% on value above R12,945,000 |
First-Time Buyer Exemption
Great news for first-time buyers! If you're buying your first property and it costs R1,100,000 or less, you pay zero transfer duty.
Who Qualifies?
- You've never owned property before
- You're a natural person (not a company or trust)
- The property costs R1,100,000 or less
- You'll use the property as your primary residence
Example: Buying your first home for R1,050,000? You pay R0 transfer duty and save R0 that would have otherwise been payable!
Transfer Duty Calculation Examples
Example 1: R1,500,000 Property
Purchase Price: R1,500,000
Exempt Portion: R1,100,000 @ 0% = R0
Taxable Portion: R400,000 @ 3% = R12,000
Total Transfer Duty: R12,000
Example 2: R2,500,000 Property
Purchase Price: R2,500,000
Step 1: R1,100,000 @ 0% = R0
Step 2: R412,500 @ 3% = R12,375
Step 3: R987,500 @ 6% = R59,250
Total Transfer Duty: R71,625
Example 3: R3,000,000 Property
Purchase Price: R3,000,000
Step 1: R1,100,000 @ 0% = R0
Step 2: R412,500 @ 3% = R12,375
Step 3: R605,000 @ 6% = R36,300
Step 4: R277,500 @ 8% = R22,200
Total Transfer Duty: R70,875
Other Property Purchase Costs
Transfer duty is just one of several costs when buying property. Here's what else you need to budget for:
| Cost | Estimated Amount | Paid To |
|---|---|---|
| Transfer Duty | 0-13% of purchase price | SARS (via attorney) |
| Conveyancing Fees | R10,000 - R25,000 | Transfer attorney |
| Bond Registration | R10,000 - R30,000 | Bond attorney |
| Bond Initiation Fee | ±R6,000 | Bank |
| Deeds Office Fees | R1,000 - R3,000 | Deeds Office |
| Rates Clearance | R500 - R2,000 | Municipality |
When is Transfer Duty Not Applicable?
You don't pay transfer duty in these situations:
- New Developments: Properties bought directly from developers are subject to VAT (14%), not transfer duty
- First-Time Buyers (under R1.1M): As discussed above
- Property Transfers Between Spouses: Certain exemptions apply
- Inheritances: Estate duty may apply instead
Important Note:
If you're buying a new property from a developer, you'll pay 14% VAT instead of transfer duty. This is included in the purchase price, so you don't pay it separately.
Calculate Your Transfer Duty
Use our free transfer duty calculator to see exactly how much you'll need to pay for your property purchase.
Try Transfer Duty Calculator →Frequently Asked Questions
Who pays transfer duty, the buyer or seller?
Transfer duty is always paid by the buyer, not the seller. It's one of the costs you need to budget for when purchasing property.
When must transfer duty be paid?
Transfer duty must be paid to SARS before the property can be transferred into your name. Your conveyancing attorney will handle this payment on your behalf.
Can I claim transfer duty as a tax deduction?
No, transfer duty is not tax-deductible for personal property purchases. However, if you're buying property for business purposes, different rules may apply.
What's the difference between transfer duty and VAT?
Transfer duty applies to second-hand properties. VAT (14%) applies to new properties bought directly from developers. You pay one or the other, never both.
How long does property transfer take?
The transfer process typically takes 8-12 weeks from the date of sale, but can be faster or slower depending on various factors including bond approval and documentation.