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What’s important?
- 21 June 2023 – With Transfer Duty, there is a sequence of events that must be followed. However, there are four scenarios where the sequence of events is not always followed:
- Divorce and then later inheritance;
- Massed estate;
- Divorce and re-marriage;
- Inheritance where the surviving spouse is also donating her share to the children – not mentioned in the will as a massed estate, but clear from the contents that such occurred.
See the sequence of events in relation to the Transfer Duty scenarios.
- 11 April 2022 – A message to all Conveyancers in connection with Transfer Duty applications. Did you know you only have seven days to upload your supporting documents after the final request letter was issued? See our communique for more detail.
What is it?
Transfer Duty is a tax levied on the value of any property acquired by any person by way of a transaction or in any other way. For the purpose of Transfer Duty, property means land and fixtures and includes real rights in land, rights to minerals, a share or interest in a “residential property company” or a share in a share-block company. All Conveyancers are requested to register with SARS. See more on the registration of Conveyancers here.
Top Tip: Make sure that you are using the correct rate, depending when the property was acquired.
Who pays Transfer Duty?
- For acquisitions:
The person acquiring the property - For renunciations:
The person in whose favour or for whose benefit, any interest in or restriction upon the use or disposal of property has been renounced.
There are exceptions, for more detail click here.
How do I submit my Transfer Duty Declaration?
- A Transfer Duty Declaration can be submitted to SARS in one of two ways:
- Should supporting documents be required, it will be requested of the Conveyancer to upload such electronically. Once satisfied, the application will be approved. If no payment is required, the system will automatically release the receipt after approval.
- Should a payment be required, the Conveyancer will make such via eFiling after which the receipt will be issued.
- It is advised that all parties ensure their tax affairs are in order as property transfers are used in an attempt to ensure tax compliance across all taxes. If, for example, you are not registered or you have outstanding tax returns or payments, you will be given the opportunity to correct matters with SARS. Should matters not be resolved, steps will be taken to ensure compliance and this may delay the transfer of the property. One such step that may be taken is the appointment of the Conveyancer or any other person as an agent with the instruction to pay SARS from the proceeds of the sale. It is further recommended that you ensure that your personal details (ID number, Income Tax/VAT number) on our systems are correct as any disparity could also cause delays.
- A taxable supply is a supply on which VAT must be charged at the standard rate (it increased from 14% to 15% from 1 April 2018) or at the zero rate. To be a taxable supply, the supplier (seller or transferor) must be a “vendor” and the supply of the property must be in the course or furtherance of an “enterprise.”
- The supply of an entire enterprise with all its assets (including any fixed property) as a “going concern” may qualify as a zero-rated taxable supply if all the conditions in section 11(1)(e) of the VAT Act are met. Refer to Interpretation Note 57: Sale of an enterprise or part thereof as a going concern and VAT News 15 – August 2000 for more details in this regard.
When should it be paid?
Duty is payable within six (6) months from the date of acquisition. If the Transfer Duty is not paid within this period, interest calculated at 10% per annum for each completed month. A completed month is calculated as the first day from the expiry of the interest free 6-month period to the date of payment.
Remember that in the case of conditional sales the period of 6 months commences from the date on which the transaction was entered into (i.e. the last date of party signature to the agreement), and not the date when the contract becomes binding upon the parties (i.e. the date the conditions are fulfilled.)
How should it be paid?
From 1 April 2011 all Transfer Duty must be paid electronically via eFiling. This will normally be done by a Conveyancer, who acts on your behalf.
Related Documents
LAPD-Gen-G08 – Guide on the Taxation of Professional Sports Clubs and Players
LAPD-IT-G19 – Comprehensive Guide to Dividends Tax
LAPD-IT-G20 – Guide to the Taxation of Special Trusts
LAPD-IT-G24 – Guide on Mutual Agreement Procedures
Legal-Pub-Guide-Gen01 – Taxation in South Africa
Legal-Pub-Guide-Gen02 – Guide for Tax Rates Duties Levies
Legal-Pub-Guide-TD01 – Transfer Duty Guide
TD-AE-02-G02 – Guide for Transfer Duty via eFiling – External Guide
Frequently Asked Questions
FAQ: What constitutes “property” for the purpose of Transfer Duty?
Property includes: Land and fixtures; Real rights in land, excluding...
Read MoreFAQ: What are the Transfer Duty rates?
For the latest Transfer Duty rates, click here.
Read MoreFAQ: Can the sale of a property be subject to both VAT and Transfer Duty?
No, the sale of property will be subject to either...
Read MoreFAQ: Which party determines what rate of Transfer Duty should apply?
The seller determines whether a transaction should be subject to...
Read MoreFAQ: Which channels can I use to submit my Transfer Duty documents and ultimately pay Transfer Duty?
All transfer duty declaration and documentation when needed can be...
Read More