Page 8 - Robin Twaddle PTG 2017 Digital

TRANSFER DUTY ON IMMOVABLE PROPERTY

Transfer duty is an indirect tax on the acquisition of immovable property situated in South
Africa. The following are the main provisions:
◆◆ It is calculated on the value of the immovable property (purchase price or market value

whichever is the highest).
◆◆ It is payable within six months after the transaction is entered into.
◆◆ Where a registered VAT vendor purchases property from a non-vendor, the notional

input tax is calculated by multiplying the tax fraction (presently 14/114) by the lesser
of the consideration paid or market value.
◆◆ The acquisition of a contingent right in a trust that holds a residential property or
the shares in a company or the member’s interest in a close corporation which owns
residential property comprising more than 50% of its assets, is subject to transfer duty
at the applicable rate.

Transfer duty is calculated as follows:

R0 – R900 000 0%

R900 001 – R1 250 000 3% of the value over R900 000

R1 250 001 – R1 750 000 R10 500 + 6% of the value over R 1 250 000

R1 750 001 – R2 250 000 R40 500 + 8% of the value over R 1 750 000

R2 250 001 – R10 000 000 R80 500 +11% of the value over R2 250 000

R10 000 001 + R933 000 + 13% of the value over R10 000 000

The most notable exemptions from transfer duty are the following:
◆◆ If the purchase price/value is R900,000 or less.
◆◆ If the transaction is subject to VAT (i.e. where the seller is a VAT vendor).
◆◆ In the event of immovable property being transferred to a person (including a close

corporation, company or trust), in terms of a Last Will and Testament, or as a result of
intestate succession.
◆◆ The transfer of any property to a surviving spouse, or divorced person, who acquires
sole ownership of the whole or any portion of property registered in the name of his or
her deceased or divorced spouse where that property or portion is transferred to that
surviving or divorced spouse as a result of the death of his or her spouse or dissolution
of the marriage or union.

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