Good News for Buyers - Transfer Duty Threshold Lowered
Category 3%.Com Properties
ALERT ALERT ALERT!
For buyers or investors, buying a property below R1.1m is now even more attractive, as no Transfer Duty will be payable.
What is Transfer Duty? Transfer Duty is tax that is payable to SARS, when you purchase a property with a purchase price above R1.1m
South Africa's Finance Minister Enoch Godongwana announced on 22 February 2023, that properties valued less than R1,100, 000 will no longer attract transfer duty as from 1 March 2023. Previously, the transfer duty threshold was R1,000,000.
As a buyer, it is your responsibility to pay the transfer duty within 6 months of the date of purchasing your property. If you fail to pay the transfer duty within the stipulated time period, you land up paying penalties and interest will be added.
However, there are exemptions when it comes to paying transfer duty. The exemptions are as follows:
1. Divorce
If a property is awarded to a spouse from a divorce order, transfer duty does not apply. This applies to all types of marital regimes as well as civil unions.
2. Married in community of property
When a property owner marries in community of property, their spouse immediately inherits half of the share in the property and he or she does not have to pay transfer duty.
3. Inheritance
When Beneficiaries and heirs inherit the deceased estate, they are not required to pay the transfer duty. This applies irrespective of the relationship to the deceased and regardless of the deceased passing without a will.
4. Transactions that are cancelled
There is no liability to pay the transfer duty to SARS if the property purchased is cancelled before registration at the Deeds Office.
*To determine if your property transfer falls within the exemptions above, consult professional advice.
Important to note that transfer duty is separate to transfer fees and bond registration fees. Transfer duty is tax that is payable to SARS, whereas transfer fees are payable to the attorneys/conveyancer who attends to the transfer of the property, and bond registration fees are payable to the attorneys who register the bond over the property.
The amount payable for transfer duties, is calculated based on the value of the property you have purchased. As a buyer it is important to be aware of transfer duty and to make sure it is paid within the right time frame, if the property is sold for more than R1.1million.
At 3%.Com Properties®, our Attorneys and Property Consultants are well equipped to guide you whilst buying or selling property.
Contact us to find more and/or visit our website.
Author: 3%.Com Properties