Buying a home is not only about the purchase price and the monthly bond repayment. There are once-off costs that need to be paid before the property can be transferred into your name. One of the most important of these costs is transfer duty.
Transfer duty is a tax paid to the South African Revenue Service when a property changes ownership. It does not apply to every property purchase, but when it does apply, it can make a meaningful difference to the cash a buyer needs before registration. That is why it should be checked before you sign an offer to purchase.
What is transfer duty?
Transfer duty is a government tax on the acquisition of property. In simple terms, it is paid because ownership of the property is being transferred from the seller to the buyer.
The transferring attorney usually handles the process. The buyer pays the required amount to the attorney, the attorney pays SARS, and SARS issues the receipt or transfer duty exemption needed for the transfer to proceed.
This matters because transfer cannot usually move forward at the Deeds Office until the necessary SARS requirements have been dealt with. Even a buyer with an approved home loan may face delays if transfer duty and other transfer-related costs are not ready in time.
When does transfer duty apply?
Transfer duty depends mainly on the value of the property and whether the sale is subject to VAT. SARS publishes the transfer duty brackets each tax year. For the 2026 year, effective from 1 April 2025, properties valued up to R1 210 000 fall into the 0% transfer duty bracket. Above that value, transfer duty is calculated on a sliding scale.
This does not mean the buyer has no other costs. A property below the transfer duty threshold may still have transfer attorney fees, bond registration fees, bank initiation costs, Deeds Office fees, and other administration costs.
Transfer duty is not the same as transfer costs
Many buyers use the words transfer duty and transfer costs as if they mean the same thing. They do not.
Transfer duty is the tax payable to SARS. Transfer costs are the broader costs involved in transferring the property into the buyer’s name. These may include the transferring attorney’s professional fee, Deeds Office fees, FICA administration, postage and petties, and VAT on legal fees.
Bond registration costs are separate again. Those relate to registering the mortgage bond over the property in favour of the bank. A buyer who uses a home loan will usually have both transfer costs and bond registration costs to budget for.
Why transfer duty affects affordability
A buyer may qualify for the monthly home loan repayment but still struggle with the upfront cash needed to complete the purchase. This is one reason affordability should be viewed in two parts: monthly affordability and upfront affordability.
Monthly affordability is about whether your income can support the proposed bond instalment and existing commitments. Upfront affordability is about whether you have enough available cash for the deposit, transfer-related costs, moving costs, insurance setup, municipal deposits, and immediate repairs or improvements.
If transfer duty is underestimated, the buyer may need to find extra cash at short notice. That can create stress late in the process, especially after an offer has already been accepted.
How buyers should plan for transfer duty
Before making an offer, ask for an estimate of the total cash required to purchase the property. This estimate should include transfer duty where applicable, transfer attorney fees, bond registration costs, and any deposit required by the bank or seller.
It is also useful to consider a small buffer. Quotes can vary, and buyers sometimes forget about practical moving expenses such as connection fees, security upgrades, transport, cleaning, curtains, and minor maintenance.
A practical buyer checklist
- Check whether the property price falls above the current transfer duty threshold.
- Ask for a full purchase cost estimate before signing the offer.
- Separate transfer duty, transfer costs, bond costs, and deposit in your budget.
- Keep upfront funds accessible so payments can be made when requested.
- Do not assume a 100% bond means a zero-cash purchase.
Can transfer duty be added to the home loan?
In most cases, buyers should assume transfer duty and transfer-related costs need to be paid from their own funds. A home loan is usually granted against the property purchase price or bank valuation, not as a blank facility for all buying costs.
Even where a bank approves a high loan-to-value bond, the buyer may still need cash for legal costs and other once-off expenses. This is why pre-approval and a full cost estimate work best together. Pre-approval gives you an indication of bond affordability, while the cost estimate helps you understand the cash needed to complete the transaction.
What happens if you cannot pay on time?
If transfer duty or transfer costs are not paid when required, the transfer process can slow down. The transferring attorney must complete certain steps before lodgement, and outstanding payments can delay the matter.
This may frustrate the seller, affect agreed timelines, and add pressure to the buyer. In some transactions, delays can also create knock-on problems because the seller may be buying another property at the same time.
Conclusion
Transfer duty is not the most exciting part of buying a home, but it is one of the costs that can make or break a smooth transaction. Buyers should check the current thresholds, understand whether transfer duty applies, and budget for all transfer-related costs before making an offer.
A good home buying plan does not only ask, “Can I afford the monthly repayment?” It also asks, “Do I have the cash needed to complete the purchase properly?” When both answers are clear, the buying process becomes far less stressful.