The New R1.21 Million Transfer Duty Threshold: What Home Buyers and Sellers Need to Know in 2026
Buying or selling property in South Africa involves more than agreeing on a purchase price. You also need to understand transfer duty, conveyancing, supporting documents, municipal clearances and the practical steps required to register the property in your name.
For the 2026/2027 tax year, the transfer duty exemption threshold is R1,210,000. This means that you generally pay no transfer duty on a property acquired for R1.21 million or less, provided the transaction is not subject to VAT.
The threshold can reduce your upfront costs, but it does not remove every expense associated with a property transfer. You still need to budget for conveyancing fees, Deeds Office charges, bond registration costs where applicable, and other transaction-related expenses.
This guide explains what the threshold means, how the rates work and how you can help prevent avoidable delays.
Understand What the R1.21 Million Threshold Means
Transfer duty is a tax imposed on the acquisition of property in South Africa. It is usually payable by the purchaser and is calculated according to the property’s value or purchase price, depending on the circumstances.
The R1,210,000 threshold applies to properties acquired on or after 1 April 2025 and remains applicable for the 2026/2027 period. According to the South African Revenue Service (SARS) transfer duty table, no transfer duty is payable on property valued at R1,210,000 or below.
The threshold is not a general discount applied to every property. Instead, the first R1.21 million falls within the 0% bracket. If the property costs more than R1.21 million, transfer duty is calculated progressively on the relevant portion of the value.
For example, if you buy a property for R1,300,000, you do not pay 3% on the full purchase price. The 3% rate applies to the R90,000 above the threshold.
Check the 2026/2027 Transfer Duty Rates
The applicable transfer duty rates are progressive. This means that different portions of the property value are taxed at different rates.
Property value | Transfer duty rate |
R1 – R1,210,000 | 0% |
R1,210,001 – R1,663,800 | 3% of the value above R1,210,000 |
R1,663,801 – R2,329,300 | R13,614 plus 6% of the value above R1,663,800 |
R2,329,301 – R2,994,800 | R53,544 plus 8% of the value above R2,329,300 |
R2,994,801 – R13,310,000 | R106,784 plus 11% of the value above R2,994,800 |
R13,310,001 and above | R1,241,456 plus 13% of the value above R13,310,000 |
The rates apply to both natural and non-natural persons, including individuals, companies, close corporations and trusts, subject to the relevant tax rules.
Calculate a Simple Example
Suppose you purchase a home for R1,500,000.
The first R1,210,000 falls within the 0% bracket. The remaining R290,000 falls within the 3% bracket:
R290,000 × 3% = R8,700 transfer duty
This is only an illustration. Your conveyancer should confirm the correct amount based on the transaction structure, property value, VAT position and applicable SARS requirements.
You can also use TRM’s Property Transfer Cost Calculator to estimate transfer-related costs. The calculator allows you to consider factors such as the purchase price, loan amount, ownership type, VAT registration and purchaser status.
Distinguish Transfer Duty from VAT
Transfer duty and VAT are generally not charged on the same property transaction.
If the seller is a VAT vendor and the sale forms part of that seller’s taxable enterprise, VAT may apply instead of transfer duty. For example, a property sold by a property development company may be treated differently from a private individual’s sale of a family home.
The VAT position should be confirmed before you sign or rely on the sale agreement. A misunderstanding may result in a substantial and unexpected difference in the amount you need to pay.
Ask these questions before proceeding:
Is the seller registered for VAT?
Is the property being sold as part of the seller’s business?
Does the purchase price include VAT?
Is transfer duty payable?
Who is responsible for obtaining the necessary tax documentation?
Have the estimated conveyancing and registration costs been explained?
Do not assume that the word “VAT” in an estate agent’s listing or quotation answers every legal and tax question. Obtain confirmation from the conveyancer or tax adviser handling the transaction.
Know What Conveyancing Involves
Conveyancing is the legal process used to transfer ownership of immovable property from the seller to the buyer. A conveyancing attorney manages the transaction and works with the parties, estate agent, financial institution, municipality, SARS and the Deeds Office.
The process commonly includes:
Reviewing and signing the sale agreement.
Confirming the parties’ identities and authority to transact.
Obtaining the seller’s title deed and relevant property information.
Requesting municipal rates clearance figures.
Obtaining levy clearance information for sectional title property.
Preparing transfer documents and powers of attorney.
Collecting and verifying supporting documents.
Attending to transfer duty payment or obtaining the relevant SARS confirmation.
Lodging the documents at the Deeds Office.
Monitoring registration and accounting to the parties after registration.
The exact process may differ depending on whether the property is freehold, sectional title, bonded, unbonded, held in a trust or owned by a company.
TRM’s Property Law service includes assistance with property transfers, bond registrations, property disputes and sectional title matters.
Prepare Your Documents Early
Incomplete or inconsistent documentation is one of the most common causes of conveyancing delays. You can make the process smoother by preparing your documents as soon as the sale is agreed.
If you are the buyer, prepare:
A certified copy of your identity document or passport.
Proof of residential address.
Proof of marital status and, where relevant, your antenuptial contract.
Your tax details and contact information.
Proof of payment for required costs.
Bond approval or proof of funds.
Company, trust or close corporation documents, if applicable.
If you are the seller, prepare:
A copy of your identity document or passport.
Proof of address.
Your marital status and matrimonial property regime details.
The original title deed, if available.
Details of your existing home loan.
Municipal account information.
Body corporate or homeowners’ association details.
Compliance certificates where required.
Estate agent and bank details.
If the property is owned by a trust, company or estate, additional authority documents may be needed. Do not wait until the conveyancer requests these documents if you already know that they apply to your transaction.
Avoid Delays Before You Sign
A sale agreement is legally important. It should clearly explain the purchase price, payment terms, occupation date, occupational rent, suspensive conditions and responsibility for costs.
Before signing, check:
Whether the sale depends on bond approval.
The deadline for obtaining finance.
Whether the purchase price includes VAT.
Who pays transfer duty and other transaction costs.
The agreed occupation date.
Whether occupational rent will apply.
What fixtures and fittings are included.
Whether the property is sold subject to any defects or conditions.
What happens if either party fails to meet a deadline.
For instance, a buyer may assume that occupation takes place on registration, while the seller expects the buyer to move in earlier. If the agreement does not address occupational rent and possession clearly, the parties may face unnecessary conflict.
Use a qualified legal professional to review the agreement before you sign, particularly where the transaction involves a trust, company, estate, divorce, deceased estate or unusual payment arrangement.
Budget for More Than Transfer Duty
The threshold affects transfer duty only. It does not mean that a property priced below R1.21 million can be transferred without other costs.
Depending on your transaction, you may need to budget for:
Conveyancing fees.
VAT, if applicable.
Deeds Office fees.
Bond registration costs.
Bank initiation or loan-related charges.
Municipal rates clearance payments.
Levy clearance payments for sectional title property.
FICA and document certification requirements.
Occupational rent.
Estate agent commission, usually payable by the seller under the mandate arrangement.
Your conveyancer should provide a written estimate and explain which amounts are taxes, professional fees, disbursements or clearance-related payments.
Follow This Buyer’s Checklist
Before registration, take the following practical steps:
Confirm your total budget. Include the deposit, transfer costs, bond costs and moving expenses.
Obtain finance approval early. A signed offer does not always mean that finance is finalised.
Read every condition in the sale agreement. Make sure you understand deadlines and consequences.
Send documents promptly. Delays in supplying certified documents can hold up the entire transaction.
Verify banking details independently. Confirm payment instructions directly with the conveyancing firm using a trusted contact method.
Ask for progress updates. Find out whether transfer duty, clearances and Deeds Office lodgement have been completed.
Inspect the property before registration. Confirm that the agreed fixtures and condition are consistent with the agreement.
Help the Seller’s Transfer Run Smoothly
As a seller, you can reduce delays by disclosing relevant information early. Tell the conveyancer about an existing bond, missing title deed, municipal dispute, sectional title levy issue or change in marital status.
You should also:
Notify your bank promptly that the property is being sold.
Check whether your municipal account is up to date.
Provide accurate contact details.
Confirm whether any alterations require compliance certificates.
Keep communication open with the estate agent and conveyancer.
Avoid making private arrangements that conflict with the signed sale agreement.
A property cannot simply be handed over because the parties have signed documents. Ownership generally changes when the transfer is registered in the Deeds Office.
Let TRM Guide You Through the Transfer
Property transfers can be exciting, but the legal and financial details can quickly become overwhelming. You do not have to manage the process alone.
TRM Legal and Tax Advisory Services provides accessible legal support for property transfers, bond registrations, disputes and sectional title matters. Our approach combines professional advice with practical digital tools, helping you understand your obligations, control costs and move through the transaction with greater confidence.
You can book a property law consultation, contact TRM, or begin by reviewing the transfer cost calculator.
The R1.21 million threshold may reduce transfer duty for many buyers, but preparation remains the key to a successful transaction. Understand the rates, confirm whether VAT applies, gather your documents early and ask clear questions. With the right conveyancing guidance, you can protect your interests and take the next step in your property journey with confidence.
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