Transfer Duty Rates in South Africa

Transfer duty is a tax SARS charges on the transfer of property in South Africa. It's separate from any other costs in a purchase (conveyancer's fees, bond registration, municipal rates clearance), it's payable by the buyer, and it's calculated on a sliding scale by the purchase price. It's one of the bigger upfront costs of buying a house in South Africa, and worth budgeting for early in any purchase planning.

Rates and bands change in the annual Budget. The figures in this article are the bands as at May 2026 — always confirm against the SARS website (sars.gov.za) for the latest values before committing to a purchase, because the bands creep up over time.

How transfer duty works

Transfer duty is a sliding-scale tax — the more the property costs, the more you pay, and the rate goes up in steps. Crucially, it applies to the entire purchase price, with each band of the price taxed at the rate for that band. This is the same mechanism as personal income tax: the higher bands kick in at higher prices.

A simple example: if the property costs R2 million and the first R1 million is exempt, the second R1 million is taxed at the next band's rate. You don't pay tax on the exempt portion regardless of what you pay overall.

Current bands (as at May 2026)

The transfer duty bands are adjusted from time to time in the Budget. Recent published bands have followed this structure:

• R0 – R1,100,000: No transfer duty (the threshold band).
• R1,100,001 – R1,512,500: 3% of the amount above R1.1M.
• R1,512,501 – R2,117,500: R12,375 + 6% of the amount above R1,512,500.
• R2,117,501 – R2,722,500: R48,675 + 8% of the amount above R2,117,500.
• R2,722,501 – R12,100,000: R97,075 + 11% of the amount above R2,722,500.
• R12,100,001+: R1,128,600 + 13% of the amount above R12,100,000.

Always confirm current values at sars.gov.za — these brackets are reviewed annually in the Budget Speech.

Worked examples

Using the current bands as at May 2026:

• R900,000 house: R0 transfer duty (under threshold).
• R1,300,000 house: R6,000 (3% of R200,000).
• R1,800,000 house: R29,625 (R12,375 + 6% of R287,500).
• R2,500,000 house: R79,275 (R48,675 + 8% of R382,500).
• R3,500,000 house: R182,575 (R97,075 + 11% of R777,500).
• R5,000,000 house: R347,575 (R97,075 + 11% of R2,277,500).
• R10,000,000 house: R897,575 (R97,075 + 11% of R7,277,500).
• R20,000,000 house: R2,155,600 (R1,128,600 + 13% of R7,900,000).

So a R3.5M house costs about R182k in transfer duty alone — roughly 5% of the purchase price. For higher-value property, the effective rate creeps up further as more of the price falls into the higher bands.

Who pays transfer duty

The buyer pays the transfer duty. It's due to SARS through the conveyancer, who handles the payment as part of the transfer process. The conveyancer typically asks for the transfer duty amount as part of the upfront costs before lodging the transfer at the deeds office.

If you're buying property, factor transfer duty into your total acquisition cost — it's one of the biggest line items alongside the deposit, conveyancer's fees, and bond registration costs.

VAT or transfer duty — not both

Some property sales are subject to VAT instead of transfer duty. The two are mutually exclusive — a transaction pays one or the other, never both.

VAT applies when:

• The seller is registered for VAT
• The property is being sold as part of the seller's VAT-registered business (typically applies to developers selling new houses, businesses selling commercial property, or property-investment companies disposing of stock)

VAT is currently 15% of the purchase price. The buyer's cost difference between VAT and transfer duty depends on the property price — for residential property under about R2.5M, transfer duty would usually be lower than 15% VAT. For higher-priced property, VAT may actually be cheaper for the buyer than transfer duty.

When buying from a developer or business, ask whether the sale is VAT-inclusive or transfer-duty applicable. The contract should make it explicit.

Exemptions and special cases

• Inheritance. Transferring property to an heir under an estate doesn't attract transfer duty (estate duty applies separately to the estate as a whole).
• Divorce. Transferring property between spouses pursuant to a divorce order is exempt from transfer duty.
• Donations. Donations between spouses are exempt; other donations may still attract transfer duty plus donations tax.
• Cession of a beneficial right. If the property is being transferred from a trust to a beneficiary in certain circumstances, transfer duty may be reduced or exempt — get specialist advice.
• Cession of shares in a property-owning company. In some cases this attracts securities transfer tax (STT) rather than transfer duty.

How transfer duty is paid

Mechanics:

1. The conveyancer calculates the duty from the purchase price in the deed of sale.
2. The buyer pays the duty to the conveyancer's trust account in advance.
3. The conveyancer lodges the duty with SARS and obtains a transfer duty receipt (TDR).
4. The TDR is one of the documents required to register the transfer at the deeds office.
5. Without the TDR, the transfer can't proceed — even if everything else is in place.

When transfer duty is calculated

The duty is calculated on the actual purchase price in the deed of sale, not on a separate valuation. There's a SARS rule, though, that if the declared price is materially below the property's open-market value, SARS can use the market value instead. Pricing a sale artificially low to reduce transfer duty is therefore both ineffective and legally risky.

What if you're a first-time buyer?

South Africa doesn't have a special first-time-buyer transfer duty rate. The standard bands apply regardless of whether you've bought before. The current R1.1M threshold (as at May 2026) does, however, mean that most genuinely entry-level properties pay no transfer duty at all — which has effectively the same outcome.

Where transfer duty fits in total purchase costs

For a typical R2M property purchase, your upfront costs (in addition to the deposit) include:

• Transfer duty: around R41k-R50k
• Conveyancer's fees (for transfer): roughly R20k-R30k
• Bond registration costs: roughly R20k-R30k
• Initiation fees and bond charges: R5k-R10k
• Rates clearance and other municipal costs: variable, usually small

So total transfer-and-bond costs on a R2M property are roughly R85k-R120k beyond the deposit. Plan for this — it's real money that needs to be in your bank account before transfer happens.

Frequently asked questions

Are transfer duty brackets the same every year?

No. SARS reviews the brackets in each annual Budget. The threshold of R1.1M has been adjusted upwards several times over the years and may continue to be adjusted as house prices rise. Always check the current bands at sars.gov.za before relying on the figures.

Does the seller pay any transfer-related taxes?

The seller may have a Capital Gains Tax liability on the profit from the sale (calculated against their base cost plus improvements). CGT is separate from transfer duty and is paid by the seller, not the buyer.

Can I claim transfer duty back later?

No. Transfer duty is a one-off tax on the transaction; it's not refundable and can't be reclaimed as a deductible expense (though it can be added to the cost base for CGT purposes when you eventually sell).

If I'm transferring property into a trust, do I pay transfer duty?

Yes, generally. Transferring property from yourself to a trust is a deemed disposal and attracts transfer duty calculated on the property's market value. There are limited exceptions; get specialist advice.