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Transfer duty is a government tax that property buyers must pay to SARS when purchasing real estate in South Africa. As of September 2025, transfer duty rates range from 0% to 13% depending on the property value, with the first R1,210,000 being exempt from this tax.
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Transfer duty is a mandatory tax paid by property buyers to SARS based on the purchase price, with rates starting at 3% for properties above R1,210,000.
The tax must be paid before property registration can occur, and failure to pay on time results in penalties and delays in ownership transfer.
| Property Value Range (R) | Transfer Duty Rate | Example Calculation |
|---|---|---|
| 0 - 1,210,000 | 0% | R1,000,000 property = R0 |
| 1,210,001 - 1,663,800 | 3% of amount above R1,210,000 | R1,500,000 property = R8,700 |
| 1,663,801 - 2,329,300 | R13,614 + 6% above R1,663,800 | R2,000,000 property = R33,786 |
| 2,329,301 - 2,994,800 | R53,544 + 8% above R2,329,300 | R2,500,000 property = R67,200 |
| 2,994,801 - 13,310,000 | R106,784 + 11% above R2,994,800 | R5,000,000 property = R327,356 |
| 13,310,001+ | R1,241,456 + 13% above R13,310,000 | R15,000,000 property = R1,461,156 |
What exactly is transfer duty in South Africa today?
Transfer duty is a tax imposed by the South African Revenue Service (SARS) on the transfer of immovable property from one owner to another.
This tax applies to all property transactions including sales, donations, exchanges, and inheritances within South Africa. As of September 2025, the tax is calculated based on the higher of either the purchase price or the market value of the property.
The current transfer duty system uses a progressive rate structure, meaning higher-value properties face higher tax rates. The rates were last updated on 1 April 2025, with the exemption threshold set at R1,210,000.
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Who has to pay transfer duty when buying property?
The buyer is always responsible for paying transfer duty when purchasing property in South Africa.
This applies to all property buyers, whether they are South African citizens, permanent residents, or foreign nationals. The seller does not pay transfer duty under normal circumstances.
There is one important exception: if the property transaction is subject to VAT (such as when buying directly from a developer), then transfer duty is not payable. This is because VAT and transfer duty are mutually exclusive taxes.
The buyer cannot avoid this responsibility by negotiating with the seller, as SARS requires the duty to be paid before property registration can proceed.
What are the current transfer duty rates in South Africa, broken down by property value?
| Property Value Range (R) | Transfer Duty Rate | Cumulative Amount Due |
|---|---|---|
| 0 - 1,210,000 | 0% | R0 |
| 1,210,001 - 1,663,800 | 3% of amount above R1,210,000 | R0 + 3% of excess |
| 1,663,801 - 2,329,300 | 6% of amount above R1,663,800 | R13,614 + 6% of excess |
| 2,329,301 - 2,994,800 | 8% of amount above R2,329,300 | R53,544 + 8% of excess |
| 2,994,801 - 13,310,000 | 11% of amount above R2,994,800 | R106,784 + 11% of excess |
| 13,310,001+ | 13% of amount above R13,310,000 | R1,241,456 + 13% of excess |
From what purchase price does transfer duty start applying, and what is the exemption threshold?
Transfer duty only applies to properties with a value exceeding R1,210,000 as of September 2025.
This means that any property purchased for R1,210,000 or less is completely exempt from transfer duty. The exemption threshold was adjusted on 1 April 2025 and represents a significant benefit for buyers of lower-value properties.
Once a property's value exceeds R1,210,000, transfer duty is calculated only on the amount above this threshold. For example, a property worth R1,300,000 would have transfer duty calculated on R90,000 (the amount above the threshold) at 3%.
This progressive system ensures that entry-level property buyers face minimal additional costs while higher-value transactions contribute more to government revenue.
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How much transfer duty would I pay on a property worth R1 million, R2 million, and R5 million today?
For a R1 million property, you would pay zero transfer duty because it falls below the R1,210,000 exemption threshold.
For a R2 million property, the calculation is: R13,614 + 6% × (R2,000,000 − R1,663,800) = R13,614 + R20,172 = R33,786 in transfer duty.
For a R5 million property, the calculation is: R106,784 + 11% × (R5,000,000 − R2,994,800) = R106,784 + R220,572 = R327,356 in transfer duty.
These calculations demonstrate how the progressive rate structure significantly increases the tax burden on higher-value properties. The effective tax rate increases from 0% on the R1 million property to 1.69% on the R2 million property and 6.55% on the R5 million property.
When exactly is transfer duty due in the property purchase process?
Transfer duty must be paid before the property can be registered at the Deeds Office in the buyer's name.
The payment deadline is six months from the date the sale agreement was signed. If transfer duty is not paid within this timeframe, SARS will impose interest charges and penalties on the outstanding amount.
In practice, most conveyancing attorneys arrange payment well before the six-month deadline to ensure smooth property registration. The transfer process cannot proceed until SARS issues a Transfer Duty Receipt confirming payment.
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How do I calculate transfer duty step by step for a specific property price?
Start by determining which rate bracket your property value falls into using the current SARS transfer duty table.
- Identify the property's purchase price or market value (whichever is higher)
- Find the corresponding rate bracket in the SARS transfer duty table
- Apply the base amount for that bracket plus the percentage rate on the excess amount
- Add any applicable interest or penalties if payment is late
- Verify the calculation with your conveyancing attorney before payment
What is the difference between transfer duty and conveyancing fees in South Africa?
Transfer duty is a government tax paid directly to SARS, while conveyancing fees are professional charges paid to the attorney handling the property transfer.
Transfer duty is calculated as a percentage of the property value using fixed government rates. Conveyancing fees are regulated professional fees that cover the legal work required to transfer ownership, including document preparation, searches, and registration.
Both costs are typically paid by the buyer, but they serve different purposes. Transfer duty generates revenue for the government, while conveyancing fees compensate the attorney for legal services.
The conveyancing attorney handles the payment of transfer duty to SARS on behalf of the buyer as part of the transfer process.
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Are there any exemptions or reductions on transfer duty, for example for first-time buyers or new developments?
South Africa does not offer special transfer duty exemptions for first-time buyers or reduced rates for new developments.
The only standard exemption is the R1,210,000 threshold that applies to all buyers regardless of their property purchase history. New developments are typically exempt from transfer duty because they are subject to VAT instead, not because of any special first-time buyer provisions.
Some specific exemptions exist for certain types of transactions, such as transfers between spouses or transfers to qualifying trusts, but these are limited in scope and subject to strict conditions.
Foreign buyers face the same transfer duty rates as South African citizens, with no additional penalties or reductions based on their nationality.
What happens if transfer duty is not paid on time, and what are the penalties?
SARS imposes interest charges and penalties on overdue transfer duty payments, calculated from the original due date.
The property registration process will be delayed or blocked entirely until the outstanding transfer duty (including penalties and interest) is paid in full. This prevents the buyer from obtaining legal ownership of the property.
Interest is calculated at the prescribed SARS rate, which is typically higher than commercial lending rates. Additional administrative penalties may also apply for significantly overdue payments.
Banks will not release bond funds if transfer duty remains unpaid, creating a cascade effect that can jeopardize the entire property transaction.
Who is responsible for submitting the transfer duty payment to SARS, and how is it actually done?
The conveyancing attorney handling the property transfer is responsible for submitting transfer duty payment to SARS on behalf of the buyer.
Payment is made electronically through SARS eFiling system, which provides immediate confirmation and generates the Transfer Duty Receipt required for property registration. The attorney typically collects the transfer duty amount from the buyer's funds (often from their bond proceeds) before making the payment.
Once payment is confirmed, SARS issues a Transfer Duty Receipt that must be submitted to the Deeds Office along with other transfer documents. Without this receipt, the Deeds Office cannot proceed with property registration.
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Where can I check the latest official SARS transfer duty tables and confirm the rules for today?
The official SARS website provides the most current transfer duty rates and calculation tables at www.sars.gov.za under the Transfer Duty section.
SARS publishes updates to transfer duty rates annually, typically taking effect on 1 April each year following the national budget announcement. The current rates shown in this article are effective from 1 April 2025.
Your conveyancing attorney should also have access to the latest rates and can verify calculations for your specific property purchase. Always confirm calculations against official SARS sources before finalizing any property transaction.
Private property websites and legal firms often publish transfer duty calculators, but these should be verified against official SARS documentation to ensure accuracy.
Conclusion
This article is for informational purposes only and should not be considered financial advice. Readers are advised to consult with a qualified professional before making any investment decisions. We do not assume any liability for actions taken based on the information provided.
Transfer duty is a significant cost that property buyers in South Africa must factor into their purchase budget, with rates ranging from 0% to 13% depending on property value.
Understanding these costs upfront and working with qualified professionals ensures smooth property transactions and helps avoid costly delays or penalties.