Ask most South Africans how much it costs to buy a property and they will quote you the purchase price. Ask them about transfer duty versus transfer costs and you may get a blank look — even from people who have bought property before.
These are two very different things, and confusing them can leave you thousands of rands short when it is time to pay. Here is a clear explanation of both.
The Simple Distinction
| Transfer Duty | Transfer Costs | |
| What it is | A tax paid to SARS | Professional and administrative fees |
| Paid to | South African Revenue Service (SARS) | Conveyancer, Deeds Office, municipality |
| Who pays | The buyer | Typically the buyer (unless negotiated otherwise) |
| Based on | Purchase price of the property | Purchase price + work involved |
| Regulated by | Transfer Duty Act 40 of 1949 | Legal fee guidelines, Deeds Office tariffs |
What is Transfer Duty?
Transfer duty is a tax levied by SARS on the value of property acquired. It applies to any acquisition of immovable property in South Africa — whether through a sale, donation, or inheritance (in certain circumstances).
Current Transfer Duty Rates (2025/2026)
| Property Value | Rate |
| R0 – R1,100,000 | 0% (no transfer duty payable) |
| R1,100,001 – R1,512,500 | 3% on the value above R1,100,000 |
| R1,512,501 – R2,117,500 | R12,375 + 6% on the value above R1,512,500 |
| R2,117,501 – R2,722,500 | R49,125 + 8% on the value above R2,117,500 |
| R2,722,501 – R12,100,000 | R97,375 + 11% on the value above R2,722,500 |
| R12,100,001 and above | R1,128,600 + 13% on the value above R12,100,000 |
Note: Rates are set by the annual Budget and may change. Confirm the current figures with SARS or your conveyancer before transacting.
Key Points About Transfer Duty
- First-time buyers are not automatically exempt — the zero-rate threshold (currently R1.1 million) applies to everyone.
- Transfer duty is payable within 6 months of the date of acquisition (typically the date of the sale agreement).
- If VAT is payable on the transaction (i.e., the seller is a VAT vendor selling in the course of their enterprise), transfer duty is not payable — but VAT at 15% is. You do not pay both.
- Transfer duty is paid through the conveyancer as part of the registration process.
When Transfer Duty Does Not Apply
- New developments sold by VAT vendors — VAT replaces transfer duty.
- Divorce settlements — transfer of property between divorcing spouses pursuant to a court order is exempt.
- Deceased estates — transfer to an heir in terms of a will is exempt from transfer duty (though other costs still apply).
What Are Transfer Costs?
Transfer costs are the professional and administrative fees associated with the legal process of registering the property in the buyer’s name. These are paid to the conveyancer and to the Deeds Office, and they exist regardless of whether transfer duty is payable.
Transfer costs typically include:
1. Conveyancer’s Professional Fee
The attorney handling the transfer charges a professional fee for their legal work. These fees are regulated by guidelines issued by the South African Law Society and are based on the purchase price of the property. The exact amount varies between firms but falls within a standard scale.
2. Deeds Office Levies
The Deeds Office charges a registration fee for processing and registering the transfer. These are government-prescribed fees based on the value of the property.
3. Postage and Petties
A small charge for correspondence, courier costs, and miscellaneous disbursements during the transfer process.
4. VAT on Legal Fees
VAT at 15% is charged on the conveyancer’s professional fee (VAT is not charged on the Deeds Office levy or transfer duty itself).
Estimated Total Transfer Costs (excluding transfer duty)
| Purchase Price | Approx. Transfer Costs |
| R1,000,000 | ~R22,000 – R25,000 |
| R2,000,000 | ~R32,000 – R38,000 |
| R3,000,000 | ~R42,000 – R50,000 |
| R5,000,000 | ~R60,000 – R72,000 |
These are estimates. Get a formal quote from your conveyancer for accurate figures.
What About Bond Registration Costs?
If you are financing the purchase with a home loan, there is a third category of costs: bond registration costs.
These are separate from transfer costs and transfer duty, and they arise from the registration of a mortgage bond over the property in favour of the bank. Bond registration involves its own conveyancer (usually appointed by the bank, not by you), its own fee, and its own Deeds Office levy.
| Purchase Price / Bond Amount | Approx. Bond Registration Cost |
| R1,000,000 | ~R18,000 – R22,000 |
| R2,000,000 | ~R26,000 – R32,000 |
| R3,000,000 | ~R35,000 – R42,000 |
Bond registration costs are paid to the bond registration attorney, who is different from the transfer attorney.
Putting It All Together: A Real Example
Suppose you are buying a property for R2,500,000 with a bond of R2,000,000.
| Cost | Estimated Amount |
| Transfer duty (on R2,500,000) | ~R122,575 |
| Transfer costs (conveyancer + Deeds Office) | ~R42,000 |
| Bond registration costs | ~R30,000 |
| Total over and above purchase price | ~R194,575 |
This is nearly R200,000 on top of the purchase price — money that must be available upfront. Most banks do not include these costs in the home loan.
Who Pays Transfer Costs?
By default, the buyer pays all transfer-related costs (transfer duty, transfer costs, and bond registration costs). However, in the sale agreement, it is possible to negotiate for the seller to cover some or all of the transfer costs — particularly in a buyer’s market. Always check the sale agreement carefully.
Frequently Asked Questions
Can transfer costs be included in my home loan?
Generally no. Most banks require transfer and bond registration costs to be paid from own funds. Some banks offer “100% bonds” that include transfer costs, but this is the exception rather than the rule and typically results in a higher loan amount and more interest paid over time.
Is there a way to reduce transfer duty?
Transfer duty is a fixed tax based on the purchase price — there is no legal way to reduce it other than accurately reflecting the correct purchase price. Understating the purchase price to reduce duty is tax fraud and carries serious penalties.
When exactly is transfer duty payable?
Transfer duty is payable within 6 months of the transaction date. In practice, the conveyancer collects the amount from the buyer at the start of the process and pays it to SARS before the registration can proceed.
What if VAT applies instead of transfer duty?
If the seller is a VAT vendor selling in the ordinary course of their trade (common in new developments), the transaction is subject to VAT at 15% on the purchase price rather than transfer duty. You pay one or the other — never both.
Who appoints the transfer attorney?
In South Africa, the seller typically nominates the transfer attorney. However, the buyer pays the fees. The bond registration attorney is nominated by the bank.
Get a Clear Picture Before You Buy
Knowing the full cost of a property transaction before you sign prevents nasty surprises. Executor Law handles conveyancing for buyers and sellers across Johannesburg, providing transparent fee breakdowns from the outset.