Conveyancing & Property News
Most people walk into a property transaction focused on the purchase price. The deposit. The bond repayments. What they don't budget for, until they're staring at an invoice, are the transfer costs. And those costs can run into tens of thousands of rands.
This guide breaks down what transfer costs are, where they come from and how to calculate them before you're caught off guard.
Transfer costs are any fees, taxes, or charges paid to a third party as part of transferring ownership of an asset. In South Africa, the term most often comes up in property sales, but the principle applies anywhere money, assets, or services change hands between parties.
Think of it this way: the purchase price is what you pay the seller. Transfer costs are what you pay everyone else involved in making that transaction legally binding and administratively complete.
These are not optional line items. They're part of the deal and they need to be in your budget from day one.
Transfer duty is a government tax levied by SARS on the purchase of property. For the 2025/26 tax year, properties valued under R1,210,000 are exempt. Above that threshold, a sliding scale applies, currently starting at 3% and rising to 13% for properties above R2,722,000.
This is often the largest single transfer cost and it's non-negotiable. You pay it or the transfer doesn't go through.
One important note: transfer duty doesn't apply if the property is purchased from a VAT-registered seller (such as a developer selling a new build). In that case, VAT at 15% applies to the purchase price instead, usually already included in the sale price, but worth confirming in your offer to purchase.
Property transfers in South Africa must be handled by a conveyancing attorney. The seller typically appoints the attorney, but the buyer pays the fees.
These fees follow tariff guidelines set by the Law Society and are calculated on a sliding scale based on the purchase price. On a R1,500,000 property, you're looking at roughly R36,000 in attorney fees before disbursements. On a R3,000,000 property, expect upwards of R50,000.
On top of the base fee, there are deeds office fees (charged by the Deeds Registry for registration), postage and petties and FICA compliance costs. These are usually itemised separately on the attorney's account.
If you're financing the purchase through a home loan, the bond also has to be registered at the Deeds Office. This is handled by the bank's appointed bond attorney and again, the buyer pays.
Bond registration fees are calculated similarly to conveyancing fees. On a R1,200,000 bond, registration costs can be around R32,000. On a R2,000,000 bond, budget for around R41,000. Some banks offer to cover bond costs as part of a promotional offer, but read the fine print carefully, it's often recovered through a slightly higher interest rate.
If the property you're buying is in an estate or managed complex with a Homeowners' Association, there's likely an additional transfer fee payable to the HOA. This covers the administrative cost of updating ownership records, issuing levy clearance certificates and onboarding the new owner.
HOA transfer fees vary widely. Some charge a flat rate of R500 - R2,000. Others tie the fee to the property value. In upmarket estates, it's not uncommon to see HOA fees of R5,000 - R15,000. Ask the agent to confirm this upfront, it rarely makes it into early conversations.
Outside of property, transfer costs also arise in business contexts. When one division, subsidiary, or holding company charges another for goods or services, they use a transfer price to quantify that internal transaction.
This matters for tax compliance, SARS scrutinises related-party transactions closely. But it also affects how each entity's profitability is measured, which has downstream implications for management decisions, external reporting and investor analysis. Getting transfer pricing right in a corporate structure isn't just an accounting formality, it directly influences where profit is recognised and how much tax is paid.
Most South African property attorneys publish online transfer cost calculators. The South African Revenue Service also has a transfer duty calculator on their website. Use both. Run the numbers at the offer-to-purchase stage, not after the paperwork is signed.
A rough rule of thumb: on a standard resale residential property, budget an additional 8 - 10% of the purchase price to cover transfer duty, conveyancing fees, bond registration and incidentals. On a new development purchased from a developer, budget 3 - 5% (transfer duty replaced by VAT).
Transfer costs aren't a surprise if you plan for them. The buyers who get stung are usually the ones who focused entirely on whether they qualify for the bond and left no room in the budget for the rest. Build the full picture before you make an offer, your savings will thank you.
Whether you’re still exploring your options or ready to proceed, Roberts Incorporated is here to support you with the conveyancing process and ensure your transfer is handled professionally from start to finish.
Need help calculating transfer costs for a specific property? Our online calculator gives you an accurate estimate in minutes.
When you’re buying or selling property in South Africa, one of the most common and confusing questions is this: Do I pay transfer duty or VAT?
It sounds simple. It isn’t always.
At Roberts Incorporated, we regularly guide buyers and sellers through this exact issue. Understanding the difference between transfer duty and VAT is essential, because it affects the total cost of your transaction, your cash flow and even how the sale agreement should be drafted.
Let’s break it down clearly.
Transfer duty is a tax imposed by SARS on the acquisition of property. In most standard residential property transactions between private individuals, transfer duty is payable by the purchaser.
The amount is calculated on a sliding scale, depending on the purchase price of the property. SARS publishes updated thresholds from time to time and the amount payable increases as the value of the property increases.
Importantly:
If transfer duty is applicable, VAT does not apply. The law does not allow both to be charged on the same transaction.
VAT applies when the seller is registered as a VAT vendor and is selling the property through their enterprise.
This typically happens when:
In these cases, VAT is included in the purchase price (unless the agreement states otherwise). The seller, not the buyer, is responsible for paying VAT over to SARS.
That’s a key difference.
With VAT transactions:
So if you’re buying directly from a developer, chances are VAT applies, not transfer duty.
South African tax law prevents double taxation on property transfers. If VAT is payable on a transaction, transfer duty is not. If transfer duty is payable, VAT is not.
However, confusion often arises when agreements are poorly drafted or when parties don’t understand the seller’s VAT status.
For example, if a seller is VAT registered but sells the property outside the course of their enterprise, VAT may not apply. In that case, transfer duty could become payable instead.
This is where having an experienced conveyancing attorney matters.
There are special situations where VAT may be zero-rated. This usually happens when a VAT-registered seller sells property to another VAT-registered purchaser and certain strict requirements are met.
For zero-rating to apply:
If these conditions are not properly recorded in the sale agreement, SARS may reject the zero-rating and the financial consequences can be significant.
Again, this highlights the importance of correct legal drafting during the conveyancing process.
Understanding whether VAT or transfer duty applies can significantly impact your total acquisition cost.
If transfer duty applies:
If VAT applies:
For first-time buyers, this distinction can mean the difference between affordability and overextending financially.
Many buyers assume this is purely a tax question. It’s not.
It is a legal question that affects how the sale agreement is structured, how funds are allocated and how SARS documentation is prepared.
During the conveyancing process, your attorney will:
Mistakes in this area can delay transfer or result in unexpected tax liabilities.
Let’s say you buy a property from a private individual who is not VAT registered. Transfer duty will apply. You, as the purchaser, must pay it.
Now imagine you buy a newly built unit in a development from a registered developer. VAT will apply and it is generally included in the purchase price. You do not pay transfer duty.
Same type of asset. Completely different tax treatment.
Property transactions are already complex. Add tax considerations, bond approvals, compliance certificates and registration requirements and it becomes clear why professional guidance is essential.
Whether you are buying your first home, investing in property, or selling a development unit, knowing whether transfer duty or VAT applies should never be guesswork.
At Roberts Incorporated, we ensure clarity from the start of the transaction. We guide you through the legal and tax implications, structure the agreement correctly and manage the entire conveyancing process efficiently and professionally.
Before signing any offer to purchase, make sure you understand which tax applies and how it affects you.
Because in property law, the details always matter.
Property transfers don’t have to be confusing or filled with tax uncertainty. Roberts Incorporated provides clear legal guidance and professional conveyancing support to ensure you understand whether transfer duty or VAT applies and how it impacts your transaction. Contact us today for trusted, straightforward assistance at every stage of your property journey.