Transfer Duty
Also known as: Property Transfer Tax, TD.
What is Transfer Duty?
Transfer duty is a tax levied under the Transfer Duty Act 40 of 1949 on the acquisition of immovable property in South Africa. It is payable by the purchaser on a sliding scale based on the value of the property, with the first R1.1 million exempt, and must be paid before the Registrar of Deeds will register transfer.
Drafted and reviewed by
Attorney & Founder, My-Contracts.co.za · Legal Practice Council of South Africa (LPC F17333)
Definition and context
Transfer duty is imposed by the Transfer Duty Act 40 of 1949 on every person who acquires immovable property situated in South Africa, unless an exemption under section 9 applies. The duty is calculated on a sliding scale set out in section 2 and updated annually in the Budget. For the 2025/26 tax year the scale begins at 0% on the first R1,100,000 of value and rises to 13% on value above R12,100,000. The duty is payable by the purchaser within six months of the date of acquisition, which in a conditional sale is the date on which the last suspensive condition is fulfilled.
Section 9 contains the principal exemptions. No transfer duty is payable where the transaction is subject to VAT under the Value-Added Tax Act 89 of 1991 (i.e. the seller is a VAT vendor and the property forms part of its enterprise), where the property is acquired by a public benefit organisation approved under section 30 of the Income Tax Act, or on certain intra-family, divorce or estate transactions. The Act operates in tandem with sections 39A of the Transfer Duty Act and 16(2)(b) of the VAT Act to prevent double taxation: a single transaction attracts either transfer duty or VAT, never both.
Operationally, no Registrar of Deeds may register transfer of immovable property until a transfer-duty receipt (issued by SARS under section 4) is lodged. The receipt is procured by the conveyancer on the purchaser\'s behalf, funded from transfer costs paid into the conveyancer\'s trust account. Failure to pay within six months triggers interest at the prescribed rate under section 4(1) and a penalty. Transfer duty is a capital cost for income-tax purposes, added to the base cost of the property under paragraph 20 of the Eighth Schedule to the Income Tax Act 58 of 1962.
Where this term lives in law
Income Tax Act 58 of 1962
Sections: 30, paragraph 20 Eighth Schedule
The principal statute governing the taxation of individuals and companies in South Africa.
Deeds Registries Act 47 of 1937
Sections: 3
Governs the registration of deeds and title over immovable property in South Africa.
Frequently asked questions
Who pays transfer duty?
The purchaser pays transfer duty, via the conveyancer, out of the funds deposited with the transferring attorney. It is in addition to the purchase price and to the bond and transfer cost components.
When is a transaction exempt from transfer duty?
Principally when the sale is subject to VAT (the seller is a VAT vendor and the property is part of its enterprise). Other exemptions include transfers by divorce order, inheritance, and to approved public benefit organisations.
What are the current rates?
For 2025/26: 0% on value up to R1,100,000; 3% on R1,100,001–R1,512,500; 6% plus R12,375 on R1,512,501–R2,117,500; rising to 13% plus R1,141,875 on value above R12,100,000. Rates are updated each Budget.
Must transfer duty be paid before registration?
Yes. Section 3 of the Transfer Duty Act and the Deeds Registries Act prohibit registration without a SARS transfer-duty receipt (or VAT receipt where applicable). The conveyancer lodges the receipt with the deed.
Is transfer duty deductible for tax?
It is not deductible as a revenue expense but forms part of the base cost of the property for capital gains tax purposes under paragraph 20 of the Eighth Schedule to the Income Tax Act.
Contract templates using this term
2 templates reference Transfer Duty.