What is it?
Transfer Duty is a tax that is levied on the value of any property that is acquired. Property includes, amongst other things, land and fixtures, real rights in land, rights to minerals, a share or interest in a “residential property company” or a share in a share-block company. You can refer to the Transfer Duty Guide for more information.
Transfer duty is levied using the rates as set out in the table below effective from 23 February 2011(Date of transaction) from:
PROPERTY VALUE RATE OF DUTY
|R0 – R600 000 ||0%|
|R600 001 – R1 000 000||3% on the value above R600 000|
|R1 000 001 – R1 500 000||R12 000 plus 5% on the value above R1 000 000|
|R1 500 001 and above||R37 000 plus 8% on the value above R1 500 000|
Please check our rates and transaction dates tables to make sure that you are using the correct rate, depending on the date the property was acquired.
Who is it for?
The purchaser of the property is liable for the payment of the transfer duty.
What steps must I take?
- Once you have consulted with your Conveyancer, he/she will submit the application electronically. We will then review the application and, should supporting documents be required, we will request these to be uploaded. Once satisfied, we will authorise the transaction. Should no payment be required, the system will issue the receipt immediately after authorisation. Should a payment be required, the Conveyancer will then proceed to do so electronically and the receipt will be issued thereafter.
- It is advisable that all parties ensure their tax affairs are up to date as property transfers are used in an effort to ensure compliance across all taxes. If, for example, you are not registered or your tax returns or payments are not up to date, you will be informed and given the opportunity to rectify matters. Should matters not be rectified steps will be taken to ensure compliance and this may affect the transfer of the property. One of the steps that may be taken is the appointing of the Conveyancer or any other person as a withholding agent to pay SARS from the proceeds of the sale. It is also suggested that you check your personal details on our records (ID and Tax number) as outdated information can also lead to possible delays.
- An area of concern is whether Transfer Duty or VAT should be charged and, if VAT, whether the sale would qualify for a going concern or be charged at the Standard Rate. The first question should be whether the sale is a taxable supply for VAT purposes. More information can be found on our website under the VAT section. To avoid any unpleasant surprises or delays, this should be established before applying for the transfer duty receipt.
When should it be paid?
Transfer Duty must be paid within 6 months from the date of last person signing the sale agreement of the sale; for example if the acquisition is by way of a sale, transfer duty must be paid within six months from the date the sale agreement is signed. If transfer duty is not paid within six months from the date of acquisition, you will be charged interest at the rate of 10% per annum.
How should it be paid?
Transfer duty must be paid electronically via eFiling. This will normally be done by a Conveyancer, who acts on your behalf.