The Minister of Finance announced a change in the rate of Transfer Duty in his budget speech.


All sales of property to natural persons on or after 1 March 2006 will benefit from the lower rates. Sales to Companies, Close Corporations, Trusts will still attract Transfer Duty of 8% of the full price.

Property Value	Rates of Tax
R0 - R600 000	0%
R600 001 - R1 000 000	3% above R600 001
R1 000 001 to R1 500 000	R12 000 plus 5%
R1 500 001 and above	R37 000 plus 8%

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Find out how much transfer duty you will have to pay when purchasing a property. Use our calculator to see how much you will have to pay.

Property Value	R
Transfer Duty Fee	R

A primary residence exclusion of a gain of up to R1 500 000.00 of profit or gain on the original purchase price of the property. Any amount over and above will be suject to CGT.


Affected capital assets are considered to be property of any kind, including assets that are movable or immovable, tangible or intangible, excluding trading stock and mining assets qualifying for an income tax deduction as capital expenditure.


The following inclusion rates are to be applied to nett capital gains:-

• Legal persons (including companies, close corporations and trusts) - 50%
• Natural persons (individuals and special trusts) - 25%

In other words, a company will only include fifty percent of the nett capital gain in taxable income (fifty percent is exempt from tax) and an individual will only include twenty five percent of the nett capital gain in taxable income (seventy five percent is exempt from tax).

Tax Payer	Inclusion Rate	Statutory Tax Rate	Effective Tax Rate
Individuals	25%	0 - 40%	0 - 10%
Companies (standard)	50%	29%	14,5%
Trusts	50%	40%	20%

We wish to point out that this is a very brief discussion regarding the effects of CGT on the property market. This should not be deemed to be an extensive and fully detailed guide, and should only be utilized as a guideline.

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