What is transfer duty?
Transfer duty is a tax paid to SARS when you purchase immovable property. It applies to properties bought from private individuals (not VAT-registered sellers). If the seller is a VAT vendor, such as a developer selling a new build, you pay VAT instead of transfer duty.
The tax is calculated on the purchase price of the property, using a sliding scale. Only the portion of the price that falls within each band is taxed at that band's rate.
The 2025 transfer duty table
| Purchase price | Rate |
|---|---|
| R0 – R1,100,000 | 0% (exempt) |
| R1,100,001 – R1,512,500 | 3% on the amount above R1,100,000 |
| R1,512,501 – R2,117,500 | R12,375 + 6% above R1,512,500 |
| R2,117,501 – R2,722,500 | R48,675 + 8% above R2,117,500 |
| R2,722,501 – R12,100,000 | R97,075 + 11% above R2,722,500 |
| Above R12,100,000 | R1,128,600 + 13% above R12,100,000 |
The R1,100,000 threshold means buyers purchasing below this price pay zero transfer duty. This is one of the most important numbers in the South African property market — and the reason you'll often see properties listed at R1,099,000.
Worked examples
Buying at R950,000
The purchase price is below the R1,100,000 threshold.
Buying at R1,500,000
The first R1,100,000 is tax-free. Only the remaining R400,000 falls into Band 2 at 3%.
Buying at R2,500,000
The price crosses three bands. Each band is calculated separately and added together.
Buying at R5,000,000
Transfer duty vs VAT
When a developer sells a brand-new property, they are typically VAT-registered. In this case:
- No transfer duty is payable
- VAT (15%) is included in the purchase price (or added on top, depending on the deal structure)
- The buyer still pays transfer attorney fees
Always ask your attorney whether the seller is VAT-registered before assuming you'll pay transfer duty.
If a developer or investor has waived transfer duty as a marketing incentive, confirm in writing whether they are absorbing it or whether VAT applies instead. They are not the same thing.
What about attorney fees?
Transfer duty is just one part of what you pay upfront. Your transfer attorney will also charge conveyancing fees based on the purchase price. These are regulated by the Law Society and scale with the property value, typically between R6,000 and R20,000 on a property priced between R1M and R3M.
Use the Zettl buyer tools to see a full breakdown of your upfront costs including transfer duty, attorney fees, bond registration, and deposit — all at once.
When do you pay?
Transfer duty must be paid to SARS within 6 months of the date of the sale agreement. In practice, your transfer attorney handles this on your behalf as part of the transfer process, using the funds you provide at registration.
Failure to pay within 6 months results in interest charged at 10.5% per annum.
Key takeaways
- Properties under R1,100,000 attract zero transfer duty — a key threshold to know
- Transfer duty is a sliding scale: only the amount above each band threshold is taxed at that band's rate
- New builds from VAT-registered developers attract VAT (15%) instead of transfer duty
- Your transfer attorney pays SARS on your behalf from funds you provide at registration
- Total upfront costs also include attorney fees and bond registration — always calculate the full picture