TRANSFER DUTY ADJUSTMENT- BUDGET 2011

As a result of the budget speech on the 23rd of February 2011 potential property owners have the following good news:

Transfer duty on property purchases concluded on or after 23rd February 2011 is structured as follows (the scale applies to natural persons, companies, CC’s and Trusts in terms of the new budget) :

R0- 600 000.00 –Exempt from transfer duty.

R600 000.01- 1000 000.00- At 3% on amount from R600 000.01.

R1000 000.00- 1 500 000.00- R12000 plus 5% on amount above R1 000 000.00.

R1 500 000.00 upwards- R37 000 plus 8% on amount above R1 500 000.00.

As an example, on the previous scale, a buyer would have had to pay R65 000.00 to SARS for transfer duty on a property of R1 500 000.00, whereas now it would only come to R37 000.00 for the same purchase price.

Further good effects for property speculators: Whereas previously companies, CC’s and Trusts were charged at a flat rate of 8% on the whole purchase price for transfer duty, the above scale will also now apply to them as well as natural persons, which will make a huge difference.