Transfer Costs VS Transfer Duty

Transfer duty is a tax levied by SARS on the value of a property acquired by any person by any means. This means that whether you buy a property or acquire it in any other way, you may be liable to SARS for payment of transfer duty. There are however exceptions to thegeneral rule, which will be discussed in a later blog.

For the purpose of calculating transfer duty, SARS prescribes annual rates which determine the amount of transfer duty payable according to the value of the property. According to SARS “property means the land as well as fixtures and includes real rights in land, rights to minerals, a share or interest in a residential property company or a share in a share-block company.”

Transfer duty is only payable on the transfer of properties valued at more than R1.1 million. If the property you are buying or acquiring (as the case may be) is worth less than R1.1 million, the transaction will not attract transfer duty. However, you will still have to pay transfer costs to the conveyancer.

Transfer duty and transfer costs should not be confused, transfer costs are the costs payable to the conveyancing attorney for attending to the registration of the transfer, transfer duty is one of these costs and is payable to SARS. Transfer duty is payable within six months of the date of acquisition of the property, failing which SARS will issue penalties for late payment.Transfer duty is however paid to the conveyancer upon inception of their appointment. It is thus the conveyancer’s responsibility to ensure the timeous payment of transfer duty to SARS.