DEFINITIVE GUIDE · PERSONAL TAX
Transfer Duty in South Africa
Transfer duty is the tax payable by the purchaser of immovable property in South Africa, governed by the Transfer Duty Act 40 of 1949. For the 2026/27 year, properties below R1,210,000 attract no transfer duty. Above that threshold, six progressive rate bands apply, reaching 13% on property values above R13,310,000. The critical complication is the VAT election — when the seller is a registered vendor, VAT applies instead of transfer duty, and the cost difference can be substantial.
R1,210,000
Zero duty threshold
Budget 2026/27
3%
First rate band
R1,210,001 – R1,663,800
13%
Top rate
Above R13,310,000
6 months
Payment deadline
From date of transaction
Purchaser
Applies to
Not the seller
15%
VAT alternative
If seller is VAT vendor — replaces duty
WHAT IS TRANSFER DUTY
The tax the buyer pays — before the keys change hands
Transfer duty is the South African tax levied on the acquisition of immovable property — land, buildings, mineral rights, and certain other interests in land. It is governed by the Transfer Duty Act 40 of 1949, one of South Africa's oldest tax statutes, and is collected by SARS. The duty is payable by the purchaser, not the seller, and must be settled before the transfer can be registered at the Deeds Office.
The mechanism is straightforward: the conveyancer handling the transfer calculates the duty based on the purchase price (or market value where the purchase price is below market value), files the transfer duty declaration form (TDC01) with SARS, pays the duty, and receives a receipt. Without that SARS receipt, the Deeds Office will not process the registration. Transfer duty is therefore an unavoidable component of the cost of buying property in South Africa — and it is often the largest single cost beyond the purchase price itself for properties above R2,000,000.
The duty is calculated on a progressive bracket basis — meaning the rate applies only to the portion of the price that falls within each band, not to the entire price. A property acquired for R2,000,000 does not attract 6% on R2,000,000. It attracts 0% on the first R1,210,000, 3% on the next R453,800, and 6% on the remaining R336,200 above R1,663,800. The result is an effective duty rate that is always lower than the headline bracket rate.
Transfer duty is one of the government's most reliable revenue sources because it is tied to the property market — a market that tends to track economic activity. Budget changes to the brackets and thresholds are therefore a significant annual policy signal. The current zero-duty threshold of R1,210,000 was set by Budget 2026/27. First-time buyers and buyers of more modestly priced homes benefit significantly from the zero threshold — it is effectively a stamp duty relief for most residential transactions below R1.2 million.
TRANSFER DUTY TABLE 2026/27
Transfer Duty Act 40/1949 · Budget 2026/27
R1 – R1,210,000
0%
No duty
R1,210,001 – R1,663,800
3%
3% above R1,210,000
R1,663,801 – R2,329,300
6%
R13,614 + 6% above R1,663,800
R2,329,301 – R2,994,800
8%
R53,544 + 8% above R2,329,300
R2,994,801 – R13,310,000
11%
R106,784 + 11% above R2,994,800
R13,310,001+
13%
R1,241,456 + 13% above R13,310,000
Transfer duty does not apply to VAT transactions.
DUTY AT COMMON PRICE POINTS
R800,000
R0
0.0%
R1,200,000
R0
0.0%
R1,500,000
R8,694
0.6%
R2,000,000
R33,846
1.7%
R2,500,000
R68,516
2.7%
R3,000,000
R107,784
3.6%
R5,000,000
R328,784
6.6%
R10,000,000
R877,784
8.8%
R15,000,000
R1,404,956
9.4%
Transfer duty only. VAT transactions exempt.
THE VAT VERSUS TRANSFER DUTY QUESTION
The most important question to answer before signing any property sale agreement
Transfer duty and VAT are mutually exclusive. Every property transaction is either subject to transfer duty or VAT — never both. The buyer must know which applies before comparing costs, because the financial difference can be enormous.
When does VAT apply instead of transfer duty?
VAT applies to a property transaction when both of the following are true: (1) the seller is a registered VAT vendor, and (2) the property is being sold in the course or furtherance of the seller's enterprise. When both conditions are met, the transaction is a taxable supply under the VAT Act and VAT at 15% applies. Transfer duty is then not charged.
The most common example is a property developer selling newly built residential units. The developer is a VAT vendor, and the sale of the units is in the course of their development enterprise. The price advertised includes VAT (at 15%) and transfer duty is not charged. The purchaser pays the VAT-inclusive price but not an additional transfer duty amount.
A seller who is a VAT vendor but is selling their own residential home as a personal asset — not in the course of a property development enterprise — does not necessarily charge VAT on the sale. The property must be sold in the course of the vendor's VAT enterprise, not simply sold by someone who happens to be VAT-registered for another business reason.
Going concerns: where a business sells property as part of a going concern transaction, specific VAT treatment applies under the VAT Act — including potential zero-rating where the going concern qualifies. This requires specialist advice and careful structuring.
The cost difference — worked at R3,000,000
Consider a R3,000,000 residential purchase. The same property from two different sellers:
Seller A — private individual, not a VAT vendor: Transfer duty applies. Duty = R106,784 + 11% × (R3,000,000 − R2,994,800) = R106,784 + R572 = R107,356 (approximately). Effective rate: 3.6%.
Seller B — VAT-registered property developer: VAT applies. VAT at 15% on R2,608,696 (VAT-exclusive price) = R391,304. Total paid by buyer: R3,000,000 (inclusive) but the VAT is embedded in the price. No separate transfer duty.
On a R3,000,000 transaction, the buyer pays approximately R107,356 in transfer duty if purchasing from a private seller, versus the VAT built into the developer's price (effectively borne by the developer through the pricing mechanism, depending on how the developer has structured the price inclusive or exclusive of VAT).
This distinction is critical at contract stage. "Does this price include VAT?" and "Is the seller VAT-registered and is this a VAT transaction?" are the two questions every buyer should ask before signing.
The "inclusive of VAT" trap in property advertising
Property developers frequently advertise new developments with the note "transfer duty included" or "no transfer duty" — which is technically correct (VAT applies, not transfer duty), but the VAT at 15% is embedded in the advertised price. The buyer is effectively paying VAT on the transaction — it simply does not appear as a separate line item in the way transfer duty would. Buyers should confirm whether the advertised price is VAT-inclusive or VAT-exclusive, and whether they can claim back the VAT as input tax (applicable only if they are VAT-registered and purchasing the property for business use). For a personal residence, the VAT is a cost — not reclaimable.
HOW TRANSFER DUTY IS CALCULATED
Worked examples across five price points — every bracket shown
Example 1 — R800,000 — zero transfer duty
A first-time buyer purchases a townhouse in Centurion for R800,000. The seller is a private individual. Transfer duty applies.
The entire purchase price falls within the zero-rate band (R1 to R1,210,000). Transfer duty: R0.
The buyer still pays conveyancing fees, Deeds Office registration fees, and bond costs if financing — but no transfer duty to SARS.
Example 2 — R1,500,000 — first bracket triggered
R1,500,000 purchase from a private seller. The amount above the R1,210,000 threshold is R290,000. Rate: 3%.
Transfer duty: R290,000 × 3% = R8,700. Total: R8,700. Effective rate: 0.6%.
Example 3 — R2,800,000 — three brackets apply
R2,800,000 suburban home, private seller. Three bands: zero to R1,210,000; 3% from R1,210,001 to R1,663,800; 6% from R1,663,801 to R2,329,300; 8% from R2,329,301 to R2,800,000.
Band 1: R0. Band 2: R453,800 × 3% = R13,614. Band 3: R665,500 × 6% = R39,930. Band 4: R470,700 × 8% = R37,656. Total: R91,200. Effective rate: 3.3%.
Example 4 — R5,000,000 — 11% band reached
R5,000,000 luxury home, private seller. Five bands apply up to the 11% bracket. Transfer duty at this level is a material cost — over R300,000 — that must be budgeted in advance and cannot be financed through the home loan in most bank structures.
The formula from the bracket table: R106,784 + 11% × (R5,000,000 − R2,994,800) = R106,784 + 11% × R2,005,200 = R106,784 + R220,572 = R327,356. Effective rate: 6.5%.
Example 5 — R15,000,000 — the 13% top tier
R15,000,000 estate or commercial property, private seller. The 13% tier applies to amounts above R13,310,000. Formula: R1,241,456 + 13% × (R15,000,000 − R13,310,000) = R1,241,456 + 13% × R1,690,000 = R1,241,456 + R219,700 = R1,461,156. Effective rate: 9.7%.
At this level, transfer duty exceeds R1,400,000. This is a significant upfront cost that affects deal structures — buyers at this level often negotiate whether the seller absorbs part of the transfer duty cost as a price reduction, or whether a corporate structure acquisition might be more efficient.
SECTION 9 EXEMPTIONS
Transactions exempt from transfer duty — and how to claim the exemption
Section 9 of the Transfer Duty Act provides for specific exemptions. These are not discretionary — where the conditions are met, no transfer duty is due and the exemption must be claimed on the TDC01 declaration form with supporting documentation.
VAT transaction (s9(15))
Who qualifies
Buyer of property from a VAT-registered seller in the course of their enterprise
How to claim
The sale agreement must confirm the VAT registration number of the seller and that VAT is applicable. The conveyancer claims the exemption on the TDC01 and attaches the agreement.
Documentation required
Sale agreement confirming VAT registration · VAT invoice
The most commonly applied exemption. On any new residential development or commercial property sold by a developer, this exemption applies automatically.
Divorce settlement (s9(1)(e))
Who qualifies
Spouse receiving property pursuant to a court order in divorce proceedings
How to claim
The property transfer must be pursuant to an order of court in divorce proceedings — not a private settlement agreement between spouses. The court order must specifically direct the transfer of the property.
Documentation required
Court divorce order specifically directing property transfer
A private divorce settlement without a court order does not qualify for this exemption. The order must be from a competent court.
Deceased estate inheritance (s9(1)(e))
Who qualifies
Heir or legatee receiving property from a deceased estate
How to claim
The transfer must be in terms of a valid will or intestate succession — from the deceased estate to the heir. Transfer duty is not payable on inheritance.
Documentation required
Letters of Executorship · L&D account · Will or intestate certificate
Applies to direct inheritance only. A subsequent sale of inherited property by the heir is subject to transfer duty in the normal way.
Spousal transfer pursuant to ANC (s9(1)(e))
Who qualifies
Property transferred between spouses pursuant to an antenuptial contract (ANC)
How to claim
The transfer must be in direct compliance with the terms of the ANC — not simply a voluntary transfer between married spouses. The ANC must specifically provide for the property transfer.
Documentation required
Registered ANC · SARS confirmation
A voluntary gift of property from one spouse to another outside the ANC does not qualify for this exemption and is subject to transfer duty.
Transfer to or from a municipality or government entity (s9(1))
Who qualifies
Certain transfers involving the State, municipalities, and specified public entities
How to claim
Multiple subsections of Section 9(1) apply — each covering a specific category of government entity. The conveyancer identifies the applicable sub-section and claims accordingly.
Documentation required
Depends on the specific transaction and entity type
Does not apply to all government entities — only those specifically listed in the relevant provisions.
Transfers to approved public benefit organisations (s9(1)(f))
Who qualifies
Property acquired by or donated to an approved PBO
How to claim
The organisation must be formally registered and approved under Section 30 of the Income Tax Act. The approval must be current at the time of transfer.
Documentation required
Section 30 approval letter from SARS · Registration certificate
The exemption applies to approved PBOs — not simply to non-profit organisations that have not yet obtained or maintained their Section 30 approval.
THE PAYMENT PROCESS
How transfer duty is paid — the conveyancer's role, the TDC01, and the SARS receipt
Transfer duty is not paid directly by the buyer to SARS. It flows through the conveyancer — the attorney authorised to handle property registration at the Deeds Office. When the buyer deposits funds into the conveyancer's trust account (typically via bond proceeds from the bank and the buyer's cash contribution), the conveyancer sets aside the transfer duty amount and prepares the TDC01 transfer duty declaration.
The TDC01 is filed electronically on SARS eFiling. It captures the purchase price, the parties to the transaction, the property description, the duty calculation, and (where applicable) the exemption being claimed. SARS processes the declaration and issues a transfer duty receipt — typically within a few business days for standard transactions, longer where an exemption requires manual review.
Without the SARS receipt, the Deeds Office will not register the transfer. The receipt is a hard prerequisite for the lodgement of transfer documents. In practice, conveyancers manage the transfer duty payment timeline carefully — paying too early (before all transaction conditions are met) can complicate refunds if the deal falls through, and paying too late delays the transfer registration.
Transfer duty must be paid within 6 months of the date of the transaction — which is generally the date of signature of the sale agreement, not the date of transfer registration. Where there are delays in the transfer process (estate transfers, complex conditions, bond delays), the 6-month clock keeps running from the signature date. Interest at a prescribed rate applies to late payments.
TRANSFER DUTY PROCESS FLOW
Sale agreement signed
Buyer and seller
6-month clock starts
Transfer duty must be paid within 6 months
Bond approved and registered
Bank / bond attorney
Funds deposited in conveyancer trust
Buyer via bond proceeds + cash
TDC01 filed with SARS
Conveyancer on eFiling
Transfer duty paid to SARS
Conveyancer from trust account
SARS receipt issued
SARS (typically 2–5 business days)
Transfer lodged at Deeds Office
Conveyancer — receipt is a prerequisite
Transfer registered
Deeds Office — buyer now holds title
TRANSFER DUTY AND CGT BASE COST
Transfer duty paid on acquisition forms part of the base cost of the property for capital gains tax purposes. When the property is eventually sold, the base cost (purchase price plus transfer duty plus other acquisition costs) is subtracted from the proceeds to determine the capital gain. A buyer who paid R91,200 in transfer duty on a R2,800,000 property has a base cost of at least R2,891,200 — reducing the eventual CGT exposure by R91,200 × the applicable inclusion rate.
FREQUENTLY ASKED QUESTIONS
Transfer duty questions answered precisely
What is the transfer duty threshold in South Africa in 2026?
The transfer duty zero-rate threshold for 2026/27 is R1,210,000. Properties acquired for R1,210,000 or less pay no transfer duty. Above that threshold, progressive rates apply: 3% from R1,210,001 to R1,663,800; 6% from R1,663,801 to R2,329,300; 8% from R2,329,301 to R2,994,800; 11% from R2,994,801 to R13,310,000; and 13% above R13,310,000.
Who pays transfer duty in South Africa?
Transfer duty is payable by the purchaser of immovable property — not the seller. It is the buyer's obligation and is calculated on the purchase price (or market value if greater). The conveyancer handling the transfer administers payment to SARS as part of the transfer process. Without the SARS receipt confirming payment, the Deeds Office will not register the transfer.
Do you pay transfer duty or VAT when buying property in South Africa?
Transfer duty and VAT are mutually exclusive on any single property transaction. If the seller is a registered VAT vendor selling property in the course of their enterprise (e.g. a property developer), VAT at 15% applies and transfer duty does not. If the seller is a private individual, transfer duty applies. Buyers must confirm which applies before signing, because the cost difference can be substantial.
How much transfer duty will I pay on a R2,000,000 property?
Transfer duty on a R2,000,000 property for the 2026/27 year is R33,846. The calculation: R0 on the first R1,210,000. R13,614 on R453,800 at 3%. R20,232 on R336,200 at 6%. Total R33,846. Effective rate 1.7%. This assumes a private seller and no VAT applicable.
When is transfer duty paid in South Africa?
Transfer duty must be paid to SARS within 6 months of the date of the transaction — typically the date of signature of the sale agreement. The conveyancer files the TDC01 declaration and makes payment. SARS issues a receipt that is required before the Deeds Office will register the transfer. Late payment attracts interest at the prescribed SARS rate.
What transactions are exempt from transfer duty in South Africa?
Key exemptions under Section 9 of the Transfer Duty Act include: transactions where VAT is payable by the seller; divorce settlements pursuant to a court order; inheritances from deceased estates; transfers between spouses in terms of an antenuptial contract; transfers to or from certain government entities and municipalities; and donations to approved Section 30 public benefit organisations. Exemptions must be claimed on the TDC01 with supporting documentation.
Is transfer duty deductible for income tax purposes?
Transfer duty is not deductible in the year it is paid for income tax purposes. However, it forms part of the base cost of the property for capital gains tax purposes — reducing the eventual capital gain when the property is sold. For business properties, transfer duty may also form part of the allowable cost for wear-and-tear allowance purposes on improvements.
What is the transfer duty rate on commercial property in South Africa?
The transfer duty rates are the same for residential and commercial property — the Transfer Duty Act does not distinguish between property types. The 2026/27 brackets apply to all immovable property. For commercial property acquired from a VAT-registered seller in the course of their enterprise, VAT at 15% applies instead of transfer duty.
CALCULATE TRANSFER DUTY
Transfer Duty Calculator
Exact transfer duty for any property value using the 2026/27 Budget bracket table. Shows full band-by-band breakdown and effective rate.
Capital Gains Tax Calculator
Transfer duty paid on acquisition reduces the CGT base cost. Calculate CGT when you eventually sell — including primary residence exclusion.
VAT Calculator
If the property transaction is subject to VAT instead of transfer duty, calculate the VAT component on any VAT-exclusive or VAT-inclusive price.
Wandile Lokwe
FAIS Key Individual · CenturionAI (Pty) Ltd · Centurion, Gauteng
20 years in South African financial services. All transfer duty brackets and thresholds on this page are sourced directly from the SARS Budget 2026/27 Tax Pocket Guide and verified against the Transfer Duty Act 40 of 1949 as amended. Transfer duty tables are updated after every February Budget. The VAT versus transfer duty distinction is one of the most consequential questions in South African property transactions — this page provides the definitive reference.