Transfer Duty vs Transfer Costs — What's the Difference?

They Are Not the Same Thing

One of the most common sources of confusion for South African property buyers is the difference between "transfer duty" and "transfer costs". These terms are often used interchangeably in everyday conversation, by estate agents, and even occasionally in bank pre-approval letters — but they refer to very different things. Understanding the distinction is essential for budgeting correctly and avoiding nasty surprises when your conveyancer sends through a cost estimate.

Transfer duty is a single government tax paid to the South African Revenue Service (SARS). It is calculated on a sliding scale based on the purchase price of the property. Transfer costs, on the other hand, are the total package of expenses required to transfer property into your name at the Deeds Office. Transfer duty is just one component of this total — alongside conveyancing attorney fees, VAT on those fees, Deeds Office levies, and various disbursements.

Think of it this way: transfer duty is to transfer costs what fuel is to the total cost of running a car. Fuel is a significant expense, but it is not the only one. You also have insurance, maintenance, and licence fees. Similarly, transfer duty may be the largest single item on your cost statement, but the other components add up to a significant amount that you must also have available in cash.

What Is Transfer Duty?

Transfer duty is a tax levied under the Transfer Duty Act, 40 of 1949, on the acquisition of immovable property in South Africa. It is payable by the buyer — not the seller — and is collected by SARS. The transfer attorney calculates the amount, collects it from the buyer as part of the trust deposit, and pays it over to SARS on the buyer's behalf. SARS then issues a transfer duty receipt, which the attorney must lodge at the Deeds Office before the property transfer can be registered.

Transfer duty is calculated on a sliding scale that is adjusted from time to time in the national budget. For the 2025/2026 tax year (effective 1 April 2025), properties purchased for R1.21 million or less are exempt from transfer duty entirely. Above this threshold, the duty is marginal — meaning each rate applies only to the portion of the purchase price that falls within that bracket, not to the full amount. The rates range from 3% on the first bracket above the threshold up to 13% on values exceeding R13.31 million. For a full breakdown of the current brackets, see our detailed transfer costs explained guide.

It is important to note that transfer duty is not payable on every transaction. If you are purchasing from a VAT-registered seller — typically a property developer — the transaction is subject to VAT at 15% instead of transfer duty. The Transfer Duty Act specifically provides that you cannot be liable for both VAT and transfer duty on the same property acquisition. Additionally, certain transfers are exempt altogether, such as a deceased estate transferring property to an heir under a will or intestate succession.

What Are Transfer Costs?

Transfer costs are the total once-off expenses that a buyer must pay, in cash, to get the property registered in their name at the Deeds Office. They comprise several distinct components, each payable to a different party. The largest component is usually transfer duty (where applicable), followed by the conveyancing attorney's professional fees, VAT on those fees, the Deeds Office registration levy, and miscellaneous disbursements.

The conveyancing attorney's fees cover the professional legal work involved in managing the transfer from start to finish. This includes receiving and checking the offer to purchase (OTP), conducting FICA identity verification on both parties, corresponding with the bond attorney and the seller's cancellation attorney (if applicable), preparing the deed of transfer, obtaining rates and levy clearance certificates, submitting transfer duty to SARS, and lodging the documents at the Deeds Office. These fees are calculated according to the tariff guidelines published by the Law Society of South Africa and are subject to VAT at 15%.

Beyond the attorney's fees and transfer duty, you will also pay Deeds Office levies (a government-prescribed registration charge), and a range of smaller disbursements. These disbursements typically include FICA verification costs, electronic document fees, postage and petties, and sometimes a property information report. While each of these is relatively modest, they add up. As a rough guide, total transfer costs typically range from 2% to 5% of the purchase price, depending on the value of the property — the percentage tends to decrease as the price increases because attorney fees do not scale linearly with purchase price.

When Is Transfer Duty Not Payable?

There are several situations where transfer duty is not payable on a property transaction. The most common is when the purchase price falls at or below the R1.21 million exemption threshold — in that case, the buyer simply pays zero transfer duty. This threshold applies regardless of whether the buyer is a first-time buyer, an investor, or a repeat purchaser. It is a universal threshold, not a special exemption for any particular group.

The second common scenario is a VAT transaction. When you purchase from a VAT-registered entity — typically a property developer selling newly built units — the transaction is subject to VAT at 15% rather than transfer duty. This is because the Transfer Duty Act provides that where VAT is payable on a property acquisition, transfer duty does not apply. In practice, the quoted purchase price from a developer usually includes VAT, but you should always confirm this with your conveyancer, because the answer determines your total cost.

A third exemption applies to certain transfers within deceased estates. When property passes from a deceased estate to an heir in terms of a will or intestate succession, no transfer duty is payable. However, if the executor sells the property to a third party to wind up the estate, the purchaser pays transfer duty in the ordinary way. There are also exemptions for transfers between spouses in terms of a court order (for example, on divorce), and certain transfers between related companies, though these are less commonly encountered by individual buyers.

Common Misconceptions

The confusion between transfer duty and transfer costs gives rise to several persistent misconceptions that trip up buyers — particularly those purchasing property for the first time. These misunderstandings can lead to serious budgeting shortfalls and delays in the transfer process. Let us address the most common ones directly.

The first and most damaging misconception is the belief that "no transfer duty" means a "free transfer". Buyers purchasing below the R1.21 million threshold, or buying from a VAT-registered developer, sometimes assume they will pay nothing beyond the purchase price. This is incorrect. Attorney fees, Deeds Office levies, and disbursements are always payable. A buyer who fails to budget for these costs may find themselves unable to proceed with the transfer, which can jeopardise the entire transaction.

The second misconception is that first-time buyers receive a special discount or exemption from transfer duty. While some countries offer first-time buyer relief, South Africa does not have a separate first-time buyer exemption for transfer duty. The R1.21 million threshold applies equally to everyone — whether you are buying your first property or your tenth. There is no additional benefit or reduced rate for first-time buyers. What first-time buyers may benefit from is a bank's willingness to grant a higher loan-to-value ratio, but this relates to the home loan, not to transfer duty.

How to Estimate Your Costs

The easiest way to get a quick estimate of both your transfer duty and your total transfer costs is to use our transfer cost calculator. Enter the purchase price and you will receive an instant breakdown showing transfer duty (based on the current SARS sliding scale), estimated attorney fees (based on tariff guidelines), Deeds Office levies, and estimated disbursements. The calculator clearly separates transfer duty from total transfer costs so you can see exactly how the two figures differ.

While the calculator provides a reliable estimate, we always recommend obtaining a written, itemised quote from a conveyancing attorney before committing to a purchase. Only a qualified conveyancer who has reviewed the actual offer to purchase and the specifics of the property can give you a final, binding figure. Factors such as sectional title additional costs, estate levy clearances, and whether the property is in a VAT transaction can all affect the final number. A reputable conveyancer will provide this quote at no charge and with no obligation.

If you are also financing the purchase with a home loan, remember that you will have bond registration costs in addition to transfer costs. These are separate fees charged by the bond attorney for registering the mortgage bond at the Deeds Office. Use our bond cost calculator to estimate those costs as well — and budget for both amounts combined.