Finance minister, Nhlanhla Nene, announced in his 2015 national budget that the rates and brackets for Transfer Duty will be adjusted with effect, 01 March 2015. The purpose of this adjustment, according to Jacques du Toit of ABSA Bank Limited, is to “provide relief to middle income group households”.
Finance minister, Nhlanhla Nene, announced in his 2015 national budget that the rates and brackets for Transfer Duty will be adjusted with effect, 01 March 2015. The purpose of this adjustment, according to Jacques du Toit of ABSA Bank Limited, is to “provide relief to middle income group households”.
Transfer duty is a form of government tax. It is payable on acquisition of immovable property, albeit improved (which includes land and fixtures thereto) or unimproved property (undeveloped erven). An acquisition of property also includes any real rights to land, but excludes bonds and leases of properties.
Transfer duty is payable by the person acquiring the property, which is payable within six months from date of acquisition. Should payment of transfer duty not take place within the prescribed period (6 months), penalty interest is charged at 10% per annum or part thereof.
Property acquired on or after 01 March 2015 is subject to transfer duty rates as set out in the graph below.
|
Value of Property (Rand) |
Rate |
|
0 – 750 000 |
Exempt from transfer duty* |
|
750 001 – 1 250 000 |
3% on the value above 750 000 |
|
1 250 001 – 1 750 000 |
R15 000 + 6% of the value above 1 250 000 |
|
1 750 001 – 2 250 000 |
R45 000 + 8% of the amount above 1 750 000 |
|
2 250 001 and above |
R85 000 + 11% of the amount above 2 250 000 |
The new rate eliminates transfer duty payable on all properties acquired on or after 01 March 2015, for less than R750 000.00 – the previous threshold being R600 000,00. The new adjustment will also see an effective decrease in Transfer Duty payable on properties acquired up to an amount of R2 250 000,00.
However Transfer Duty on property with a value over and above R2 250 000 will experience an effective increase, for example when buying a R4 million house you will be liable for Transfer duty of R277 500,00 where it used to be R237 000,00.