Buying property in South Africa involves several costs beyond the purchase price itself, and transfer duty (sometimes called transfer tax) is typically the largest of these. Administered by SARS, transfer duty is a once-off tax levied on the acquisition of property, calculated on a sliding scale that increases with the property value. Understanding how it works is essential for budgeting your property purchase.
Transfer Duty Rates for 2026
Transfer duty in South Africa follows a progressive sliding scale. For properties acquired in the 2026/2027 tax year, the rates are approximately:
- R0 – R1 100 000: 0% (no transfer duty)
- R1 100 001 – R1 512 500: 3% of the amount above R1 100 000
- R1 512 501 – R2 117 500: R12 375 plus 6% of the amount above R1 512 500
- R2 117 501 – R2 722 500: R48 675 plus 8% of the amount above R2 117 500
- R2 722 501 – R12 100 000: R97 075 plus 11% of the amount above R2 722 500
- Above R12 100 000: R1 128 600 plus 13% of the amount above R12 100 000
The zero-rated threshold of R1 100 000 means that properties purchased for R1.1 million or less attract no transfer duty at all. This is a significant benefit for first-time buyers purchasing entry-level properties.
For a property worth R2 000 000, the transfer duty would be: R12 375 + 6% of (R2 000 000 - R1 512 500) = R12 375 + R29 250 = R41 625. Use our transfer duty calculator to get the exact amount for any property value.
Who Pays Transfer Duty?
Transfer duty is paid by the buyer (purchaser) of the property. It must be paid to SARS within six months of the date of acquisition (usually the date the offer to purchase is signed), and the transfer cannot be registered in the Deeds Office until the duty has been paid.
In practice, your conveyancing attorney (transferring attorney) handles the payment as part of the transfer process. They will include the transfer duty in their estimate of total transfer costs.
Important exceptions:
- VAT-inclusive sales: If the seller is a registered VAT vendor (e.g., a property developer) and the sale includes VAT (15%), no transfer duty is payable. This is because VAT and transfer duty are mutually exclusive — you pay one or the other, not both.
- Transfers between spouses: Certain transfers between spouses (including as part of a divorce order) are exempt from transfer duty.
- Estate transfers: Property inherited through a deceased estate is exempt from transfer duty (though estate duty may apply).
Total Costs of Buying Property
Transfer duty is just one component of the total purchase costs. A complete budget should include:
- Transfer duty: As calculated above
- Conveyancing fees: Attorney fees for registering the transfer — typically R15 000 to R40 000 depending on the property value
- Bond registration fees: If you are taking out a mortgage, additional attorney fees of R10 000 to R30 000 for registering the bond
- Deeds Office fees: Approximately R1 000 to R3 000
- Bond initiation fee: Charged by the bank — typically R6 000 to R10 000
- Property valuation fee: R3 000 to R5 000 (sometimes absorbed by the bank)
For a R2 million property with a 90% bond, total purchase costs (including transfer duty) typically range from R80 000 to R120 000. This must be paid from your own pocket — banks do not include these costs in the mortgage.
Use our salary calculator to see how your take-home pay supports mortgage affordability, and the break-even calculator to evaluate the investment decision.
Transfer Duty for Property Investors
If you are buying investment property (buy-to-let), transfer duty is the same. However, you should factor it into your investment return calculations. On a R3 million investment property, transfer duty of approximately R128 000 adds significantly to your initial outlay and reduces your overall return on investment.
Rental income from the property is taxable at your marginal income tax rate (or company rate if purchased through a company). Use our rental income calculator to model the net return, and the capital gains tax calculator for eventual disposal.
Planning Tips
- Budget conservatively: Set aside 5-7% of the purchase price for total transfer and registration costs
- Check the VAT position: If buying from a developer (VAT vendor), you avoid transfer duty but the sale price includes 15% VAT
- Time your purchase: If buying near the end of a tax year, check whether new transfer duty tables will apply — threshold adjustments can save you money
- Consider company ownership: For high-value investment properties, purchasing through a company may offer tax advantages but incurs different costs. Use our company tax calculator to compare
Key Takeaways
- Properties up to R1 100 000 attract zero transfer duty — a significant benefit for entry-level buyers.
- Transfer duty is calculated on a sliding scale from 3% to 13%.
- VAT-inclusive purchases from developers are exempt from transfer duty.
- Budget 5-7% of the purchase price for total transfer costs (duty plus legal fees).
- Use our transfer duty calculator to get the exact amount for any property value.