Transfer Duty Tax and VAT.

Transfer costs in general, are paid by the Purchaser.  The transfer attorneys will then collect the transfer duty tax as part of their account, together with the transfer costs and fees, to pay on behalf of the Purchaser towards SARS.

In terms of the transfer duty act (Act 40 of 1949 as amended), transfer duty tax shall be levied on the value of a property acquired, over and above R1 000 000.00.  The calculation of this amount can be found as part of our fee calculator.

In terms of Section 9 of the aforementioned act, there are a few exceptions.

No duty shall be payable in respect of the acquisition of property by:

• Section 9(1)(e)      an heir in respect of property of the deceased
• Section 9(1)(i)       a surviving or divorced spouse who acquires the sole ownership in the whole or any portion of property registered in the name of his or her deceased or divorced spouse where that property or portion is transferred to that surviving or divorced spouse as a result of the death of his or her spouse or dissolution of their marriage or union.

Furthermore, in terms of Section 9(15), no transfer duty shall be payable in respect of the acquisition of any property under any transaction which for purposes of the Value-Added Tax Act, 1991(as amended), is a taxable supply of goods to the person acquiring such property.

In short; if the Seller is a VAT vendor and the specific property transaction is a taxable supply of goods in terms of the VAT act, then the Purchaser is except for paying transfer duty Tax as part of the expenses collected by the transfer attorney.  VAT is then due to SARS, either from the proceeds of the sale or on top of the purchase price (collected from the Purchaser).