TRANSFER DUTY VS TRANSFER COSTS

TRANSFER DUTY VS TRANSFER COSTS

We have been receiving a number of inquiries about the Transfer Duty relief announced by the Finance minister during the 2020 Budget speech, seems there is a bit of confusion between the two, below is a simplified explanation.
1. Transfer duty is a form of tax levied in terms of the Transfer Duty Act on any immovable property which is acquired by way of a transaction or otherwise. Transaction or otherwise includes the sale, ceding, donation or exchange of property. Transfer duty is payable to the South African Revenue Service (SARS) on a sliding scale as shown below.
2. Transfer costs are costs to transfer the said immovable property into the Buyer’s name charged by the Lawyers; this may include the Transfer duty tax payable to SARS. Lawyers act as Agents of SARS to collect the said Transfer duty tax.
3. See below how Transfer duty tax is calculated, in comparison from the previous tax year.
TRANSFER DUTY
2021 (1 March 2020 – 28 February 2021) – See changes from last year
Value of the property (R) Rate
1 – 1000 000 – 0%
1 000 001 – 1 375 000 – 3% of the value above R1 000 000
1 375 001 – 1 925 000 – R11 250 + 6% of the value above R 1 375 000 1 925 001 – 2 475 000 – R44 250 + 8% of the value above R 1 925 000 2 475 001 – 11 000 000 – R88 250 +11% of the value above R2 475 000
11 000 001 and above – R1 026 000 + 13% of the value exceeding R11 000 000
2020 (1 March 2019 – 29 February 2020) Value of the property (R) Rate
0 – 900 000 – 900001–1250000 – 1250001–1750000 – 1750001–2250000 – 2250001–10000000- 10 000 001 and above –
0%
3% of the value above R900 000
R10 500 + 6% of the value above R 1 250 000 R40 500 + 8% of the value above R 1 750 000 R80500+11%ofthevalueaboveR2250000
R933 000 + 13% of the value exceeding R10 000 000
Kindly visit our website and check our costs calculator before committing to buying property.

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