GOOD NEWS FOR BUYERS: THE TRANSFER DUTY THRESHOLD JUST GOT A BUMP!

If you're in the market to buy property, there's a little reason to celebrate... From 1 April 2025, the transfer duty threshold has been increased from R1.1 million to R1 210 000. That means if you're buying a home for R1.21 million or less, you won't pay a single cent in transfer duty.

And that's not all. The brackets above R1.21 million have also been adjusted, meaning even buyers in higher price ranges will likely benefit from a reduced transfer duty bill. The new rates benefit properties across all value brackets, with the most notable savings for properties valued between R1 200 000 and R3 000 000.

Why is this good news?

Transfer duty is a government tax payable when property is purchased. It's calculated on the purchase price and is paid upfront by the buyer and can run into tens or even hundreds of thousands of rands, depending on the property price.

With the increase in the threshold and the adjustment to the tariff charged, on a property purchased for R1 500 000,  a purchaser will save R3 300 and on a purchase price of R2 000 000, the saving is R7 839.

"This increase in the threshold is a welcome relief for buyers. Every cent saved on transfer duty can go towards deposits, furniture, or even home improvements. It also encourages more movement in the market, which is good for everyone involved."

- Maria Davey, Conveyancer at Meumann White Attorneys

When Does VAT Apply vs. Transfer Duty?

Here's where it gets a little technical but stick with us, because understanding this can save you stress (and surprise costs).

Rule of Thumb: You'll either pay VAT or Transfer Duty - never both.

So, what's the difference?

• Transfer Duty is the tax you pay when buying property from a seller who isn't registered as a VAT vendor or if registered, does not use the property as part of his VAT  registered business. This is the most common scenario for "second-hand" homes.
• VAT, on the other hand, applies if the seller is a registered VAT vendor and the property is sold as part of their VAT-registered business (for example, a developer selling new-build homes).

 If the property is part of a VAT registered Seller's business, VAT will be payable, and when the sales advert says, "no transfer duty" what it means is that no transfer duty is payable as the tax, in this case, VAT, is already included in the price.

If you're unsure, ask your agent or conveyancer. At Wakefields, we work closely with our sellers to make sure every detail is transparent, so buyers can make informed decisions without nasty surprises down the line.

Who Pays Transfer Duty? And When?

• The buyer pays it, but your conveyancing attorney will handle the payment to SARS.
• It's due within 6 months  of signing the offer to purchase even if there are still suspensive conditions (like bond approval), after which penalties and interest becomes payable.

A Win for Buyers, A Boost for the Market

This transfer duty threshold increase is more than just tax relief, it's a signal that government is listening to calls to make home ownership more accessible. Whether you're a first-time buyer or upsizing your family home, this new threshold means more house for your money and less strain on your savings.

If you're wondering how much transfer duty you'll pay (or if you'll pay it at all), chat to your Wakefields agent. We'll help you calculate costs, understand VAT vs. transfer duty, and guide you every step of the way.

Ready to find a home that fits your budget (and maybe skip the transfer duty too)?

Let's talk. Because your next chapter starts here.

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