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Transfer Duty and the 2015 National Budget Speech

by Michelle Fiorentinos

On 25 February 2015, Finance Minister Nhlanhla Nene announced in his 2015 national budget speech that the rates and brackets for transfer duty on the sale of property will be adjusted for all sales taking place on or after 1 March 2015.

Transfer Duty is a tax levied on the value of any property acquired by any person by way of a transaction or in any other way.

For the purpose of Transfer Duty, property means land and fixtures and includes real rights in land, rights to minerals, a share or interest in a “residential property company”.

A typical transaction would be triggered by a Seller and Purchaser entering into a Deed of Sale. With respect to the new tariff, it is the date that the Deed of Sale is entered into that is important.

All Deeds of Sale entered into on or after 1 March 2015 will be levied at the new rate.

The adjustment is intended to provide relief to middle-income households. In terms of the new rates, the threshold on which transfer duty is levied has been raised from R600 000, 00 (where it has been stuck for many years) to R750 000,00.

This means that if you purchase a property for R750 000,00 or less on or after 1 March 2015, there will be no transfer duty levied.

Therefore, the transfer duty rates that will apply to all properties acquired on or after 1 March 2015, and will apply to all persons including Companies, Close Corporations and Trusts, is the following:

Value of property (Rand)

Rate

 R0 – R750 000,00

 0%

R750 001,00 – R1 250 000,00

​ 3% on the value above R750 000,00

 R1 250 001,00 – 1 750 000,00

​ R15 000,00 + 6% of the value above R1 250 000,00

R1 750 001,00 – R2 250 000,00

​ R45 000,00 + 8% of the amount above R1 750 000,00

9 March, 2015

**Please note that these comments are summarised, may not be applicable to your particular situation and do not constitute legal advice. Please consult your legal professional should you wish to obtain a formal legal opinion.**