Becoming a new homeowner can be very exciting, but before you can decide on the furniture structure or the colour of the bedroom walls, there is one more hurdle to cross, TRANSFER COSTS!!!
Scary, isn’t it? However, it is very important to understand what exactly it is you are paying for, so you need to ensure that you receive a detailed breakdown of the fee structure.
One such fees is Transfer Duty.
Transfer Duty is a Tax payable to SARS calculated on the purchase price you will be paying for the property (if not linked parties.) This fee is paid by the conveyancing attorney who is responsible for the transfer of the property to you, on your behalf. The conveyancing attorney will ask you to pay the transfer duty together with the other related conveyancing costs to their trust account so that they can pay SARS.
However, not everyone is liable to pay this tax. In the event that the property/sale is not worth more than R1 000 000, then you are exempt from paying transfer duty.
Other exemptions include the following;
- When a person who owns a property gets married in community of property, the spouse automatically becomes half owner of the property without having to pay transfer duty.
- Properties are awarded as a result of a court order in a divorce.
- Properties inherited from a deceased estate
- Where a purchase of property is terminated before the registration of the transfer at the Deeds Office.
Transfer Duty is payable within six months from date of acquisition. If same is not paid within that stipulated period, interest is charged at 10% per annum, charged for each completed month.
Should you need any further assistance please use our online cost calculator: https://pgpslaw.co.za/cost-calculator/
Contributor Kuhle Dandala
Designation: Junior Associate
Department: Administration of Deceased Estates, Conveyancing and Public Law
Email: Kuhle@pgpslaw.co.za
