Real Estate Investor Magazine South Africa March 2015 | Page 37

FINANCE

Transfer Duty
Taxing for buyers and sellers
BY GAYE DE VILLIERS

T

axing a sale between a willing home owner
and buyer is termed as ‘transfer duty’. Critics
argue that it is simply a tax for which there is
no specific reason or rationale, other than to help fill
national coffers. In reality it imposes a further burden
on the already onerous list of costs involved in selling
and buying property.
There is no transfer duty on the acquisition of
properties below R600 000, 3% is levied on properties
above R600 000 and below R1 million, R12 000 plus
5% on the value above R1 million but not exceeding
R1.5 million, while properties purchased for R1.5
million and above incur a transfer duty of R37 000 plus
8% on the value above R1.5 million.
Here are some guidelines for transfer duty payable
by home buyers:
Purchase price
R1 million
R2 million
R3 million
R10 million

Duty
Conveyancing fee
R12 000
R14 550
R77 000
R20 350
R157 000 R26 150
R717 000 R52 250

theft. Also, the Attorneys’ Insurance Indemnity Fund
provides insurance against negligence. This is for the
protection of the client as the risk and responsibility
lies with the attorney.”

“It imposes a further burden on the already
onerous list of costs involved in selling and
buying property.”

Transfer duty has some intriguing properties. It is
hard to work out the incidence who actually ends
up paying. Economists argue that while the money
is physically paid by home buyers it is actually home
sellers who end up bearing the real cost. The reason is
that transfer duty depresses selling prices. The overall
market price, determined by the forces of supply and

*Post/petties
R950
R950
R950
R950

VAT
R2 214.10
R3 026.10
R3 838.10
R7 492.10

Deeds office
R800
R900
R1 100
R2 100

Bond cost**
R17 432.60
R24 258.60
R31 334.60
R62 451.60

*Please also make provision for provisional rates and taxes and Home Owners’ Association consent and admin fee (if applicable). **If applicable.
Initiation and inspection fees by banks not included but normally amounts to R5 700 payable either to the bank or to the conveyancing attorney.

In 2013, transfer duty, by far the largest component
of the cost burden, amounted to in excess of R8 billio