The Rates
The Transfer Duty Rates & Sliding Scale
Transfer duty is not a flat charge — it escalates through bands as the property value increases. The more expensive the property, the higher the marginal rate applied to each additional tier.
| Property Value Band | Rate | Duty on This Band |
|---|---|---|
| R0 – R1,100,000 | 0% | Nothing — fully exempt |
| R1,100,001 – R1,512,500 | 3% | 3% on the amount above R1.1m (max R12,375) |
| R1,512,501 – R2,117,500 | 6% | 6% on the amount above R1,512,500 |
| R2,117,501 – R2,722,500 | 8% | 8% on the amount above R2,117,500 |
| R2,722,501 – R12,100,000 | 11% | 11% on the amount above R2,722,500 |
| Above R12,100,000 | 13% | 13% on the amount above R12.1m |
A brief history of the scale: This single sliding scale now applies equally to all buyers — whether you're an individual, a company, a close corporation, or a trust. That hasn't always been the case. Before February 2011, companies, trusts and other legal entities faced a fixed flat rate of 8% on the full property value, regardless of how inexpensive the property was. Before March 2006, that flat rate sat even higher at 10%. The harmonisation of the scale across all entity types was a significant reform.
Estimate only: Figures worked out from the table above are for illustration purposes — actual duty may vary. Consult a conveyancer for a precise quote. VAT-registered sellers may mean no transfer duty applies at all.
Valuation
Is Duty Payable on the Purchase Price or Market Value?
This is one of the most common questions buyers ask — and the answer is both. Transfer duty is always calculated on whichever is greater: the purchase price actually paid, or the fair market value of the property as assessed by SARS.
In a normal, arm's-length transaction between unrelated strangers, the agreed price and the market value will usually be the same thing, and no further enquiry is needed. SARS accepts the purchase price at face value when the deal appears to reflect what the property is genuinely worth on the open market.
Transfer duty is always levied on the higher of what you paid and what SARS thinks the property is worth. You cannot simply agree on a low price to reduce your tax bill.
The situation becomes more complex when the parties know each other. SARS will take a much closer look — and may substitute its own independent valuation — where:
Determining Value
What Counts as the 'Value' of a Property for Duty Purposes?
The Transfer Duty Act sets out a clear hierarchy for how value is determined. It is not always simply the price on the sale agreement.
When a Price Is Paid
In an ordinary purchase, the consideration (the price) is the starting point. That amount goes into the calculation, subject to SARS having the right to substitute fair market value if the price seems too low.
When No Price Is Paid
Where property is donated, exchanged, or acquired in another way without a cash price, the declared value is used — the value stated by the acquirer in the SARS declaration form.
SARS's Fair Value Override
If SARS believes the consideration or declared value is less than true market value, they can substitute their own fair value assessment. This is the Commissioner's "trump card" in related-party deals.
Hidden costs that get added to the base: The total dutiable amount is not just the headline purchase price. Certain additional payments made by the buyer are added on top before the duty is calculated. These include: Estate agent commission — if paid by the buyer rather than the seller, it gets added in. Option or pre-emption fees — money paid to acquire the right to buy the property before the sale itself, must be included. Any other side payment to any person whatsoever that forms part of the total consideration for acquiring the property — for example, if you agree to fund the seller's overseas holiday as part of the deal, that cost joins the calculation too. The only payments excluded are transfer duty itself and the legal costs of registration — those are not added back in.
Practical tip: When buying at a public auction, SARS generally accepts the auction price without questioning it — even if it is below market value — as long as the auction was a genuine arms-length sale with no collusion. This is one of the few situations where paying less than market value does not automatically trigger a SARS valuation.
Inheriting Property
Transfer Duty on Property You Inherit
Here is some genuinely good news for heirs: in most situations, you do not pay transfer duty when you inherit property. The Transfer Duty Act specifically exempts heirs and legatees from duty when they acquire property from a deceased estate through:
Testate succession (inheriting under a will)
If the deceased left a valid will that leaves the property to you, the transfer into your name is free of transfer duty — provided the property genuinely formed part of the deceased's estate.
Intestate succession (no will exists)
Where someone dies without a will, the Intestate Succession Act determines who inherits. Those heirs who receive property under this process are equally exempt from transfer duty.
Redistribution agreements
When heirs agree among themselves to divide the estate differently from what the will prescribes — for practical reasons, like one heir taking a farm while others receive cash — the property transfers under a redistribution agreement are also exempt, provided all the assets in the redistribution come from the deceased's own estate.
When duty does arise on an estate transfer
The exemption only covers property that actually belonged to the deceased. Problems arise when a will bequeaths property that the deceased did not personally own. A common example is a joint will where two spouses pool their assets and leave everything to a third party — in that scenario, duty will be payable on the surviving spouse's half of the property in the massed estate, because that half belonged to the survivor, not the deceased.
An important nuance: No property may be "imported" from outside the deceased estate into a redistribution agreement just to avoid transfer duty. Only assets originating from the deceased's own estate can validly be part of the redistribution. The courts have confirmed this firmly.
Co-Ownership
Transfer Duty When You Buy a Share in a Property
Co-ownership is very common in South Africa — siblings buying together, investment partners co-purchasing, time-share arrangements — but the way transfer duty works on partial acquisitions trips many people up. You cannot simply calculate duty on the price you paid for your share alone.
The Statutory Formula (Section 2(5)): Y = (a / b) × C — where Y is the transfer duty actually payable by you, a is the value of the share you are acquiring, b is the total value of the whole property (all shares combined), and C is the duty that would be payable on the whole property if one person bought it all.
In plain language: you first calculate what transfer duty would be if someone bought the entire property outright. Then you apply the sliding scale to that full value to get a duty figure on the whole. Finally, you multiply that figure by the fraction of the property you are actually buying. This prevents buyers from artificially reducing their duty by splitting a single transaction into lots of small share transfers.
Buying a half-share worth R3 million in a property with a full market value of R9 million? Your duty is calculated first on R9 million, then halved — not simply on R3 million. The difference can be significant.
One important exception
The formula does not apply when you buy an undivided share in the common property of a sectional title scheme that is apportioned to a specific section and forms part of that unit. In other words, buying a sectional title flat is not affected by this formula — but buying a share in a time-share unit is, since that transaction involves acquiring a fraction of the whole unit.
Dividing Property
Transfer Duty When Co-Owners Partition (Split) Property
When co-owners decide they no longer want to share a property and divide it between themselves — each walking away with a separate, individually owned piece of land — this is called a partition transfer. The general rule here is surprisingly favourable:
Provided that each co-owner simply receives a piece of land proportionate to their existing share — without anyone paying anyone else extra money to "top up" the difference — no transfer duty arises at all. The partition is treated as a rearrangement of existing rights rather than a new acquisition.
When the partition is unequal — and someone pays to equalise it
Real properties rarely divide into perfectly equal portions. It is entirely permissible for one co-owner to pay the other a cash amount to make up the difference — provided that each partitioner still ends up receiving at least some land (not just a cash payout). A pure cash settlement without receiving any land does not qualify as a valid partition.
When an equalisation payment is made, transfer duty kicks in — but only on that payment amount. The party who makes the cash payment is liable for the duty. If the partition agreement makes no mention of any equalisation payment, the Deeds Registry will require a statement from the parties confirming that no money changed hands.
Scenario A — Equal split, no money changes hands
A, B and C own a farm in equal thirds. They partition it into three separate portions of equal value. Each receives their piece. No extra payment is made. Outcome: no transfer duty payable.
Scenario B — Unequal land, equalisation cash paid
A and B share a property. A receives the larger portion but pays B R500,000 to compensate for the size difference. Both still receive land. Outcome: A pays duty on R500,000.
Scenario C — One party gets only cash
A and B co-own a flat. A wants to buy out B entirely — B would receive cash but no land. Outcome: this is not a partition — it is a standard purchase of B's share, and normal duty rules apply.
Buying for Someone Else
Tripartite Agreements: Buying for Someone Else
A tripartite agreement is an arrangement involving three parties — typically A (the original seller), B (a middleman purchaser), and C (the ultimate buyer) — where B contracts to buy from A and then on-sells to C, all before a single transfer is registered. Historically, these were used to save transfer duty. The law has since closed that door firmly.
How it used to work (before December 2003)
Under the old rules, B could cancel his purchase agreement with A, C could cancel his purchase agreement with B, and A could then sell directly to C in a single clean transaction. This meant only one lot of transfer duty was payable — on the final price — even though two deals had effectively occurred. B pocketed the profit from the price difference without contributing a cent to SARS.
This loophole is now permanently closed: Since December 2003, the Transfer Duty Act was amended to remove this benefit. The rule now is straightforward: if B's cancellation of the A–B agreement is anything other than a complete and unconditional surrender of all rights, with no compensation received from anyone, both B and C face separate transfer duty bills. Even a modest "cancellation fee" paid to B — from A or C — is enough to trigger double liability. SARS will then assess B on the full price he agreed to pay A, and C on the full price C agreed to pay B.
What is still permissible
If B walks away with absolutely nothing — no profit, no cancellation fee, no side benefit — and the property reverts entirely to A, then the A–B transaction is treated as though it never happened. Only C then pays duty, on the price C agreed to pay. This is a narrow exception that requires very careful drafting and genuine commercial substance.
For trusts and companies not yet registered: A related use of tripartite arrangements remains relevant when a purchaser wants to buy before their trust or company has been formed. In that scenario, careful legal structuring is essential — and your conveyancer must be involved from the very beginning of negotiations.
Nominee Purchases
Nomination Agreements: What They Mean for Transfer Duty
A nomination agreement arises when someone signs a sale agreement on behalf of a principal who has not yet been identified — for example, with the words "or nominee" after the buyer's name. This is common when a property is snapped up before a trust is formed, or when someone is scouting for a client. Section 16 of the Transfer Duty Act governs exactly how this plays out, and the rules are strict.
You cannot buy property today as "John Smith or nominee" and quietly nominate a company or trust next month. The law demands same-day disclosure — or you are personally liable.
The same-day disclosure rule
When a person signs a contract as agent for a principal, or with an "or nominee" clause, they must:
Disclose the principal's full name and address
This information must be provided to the seller (or their agent) on the very same day that the agreement is signed — or, at an auction, on the day that the auctioneer accepts the bid.
Hand over the appointment documents
A copy of the documents that authorise the agent to act on behalf of the principal must accompany the disclosure — on the same day.
The penalty for non-disclosure: double duty
Fail to disclose on the same day, and the law presumes that the agent bought the property for themselves. The result is two separate transfer duty bills:
The agent pays duty
On the purchase price the agent agreed to pay in the original contract with the seller.
The nominee also pays duty
On the price for which the nominee ultimately acquires the property — effectively a second transaction in the eyes of SARS.