Budget 2017 - Transfer Duty
BUDGET 2017 – TRANSFER DUTY & ‘WITHHOLDING TAX’
In terms of the Budget Speech delivered by Minister Pravin Gordhan on 22nd February 2017 there are two items of particular interest to the property market:
1. TRANSFER DUTY
Relief will be provided to the property market through an increase in the threshold value on which transfer duty is paid.
Currently there is no transfer duty payable on property acquired for a consideration of R750,000.00 or less, however, with effect from 1 March 2017, this threshold has been increased to R900,000.00 and as such transfer duty will only apply to dispositions at a consideration in excess of R900,000.00.
The new Transfer duty rates are as follows:
Transfer duty is payable at the following rates on transactions that are not subject to VAT –
Acquisition of property by all persons:
|
VALUE OF PROPERTY (R) |
RATE |
|
0 – 900 000 |
0 % |
|
900 001 – 1 250 000 |
3 % of the value above R900 000 |
|
1 250 001 – 1 750 000 |
R10 500 + 6 % of the value above R1 250 000 |
|
1 750 001 – 2 250 000 |
R40 500 + 8 % of the value above R1 750 000 |
|
2 250 001 – 10 000 000 |
R80 500 + 11 % of the value above R2 250 000 |
|
10 000 001 and above |
R933 000 + 13 % of the value above R10 000 000 |
2. INCREASE IN TAX TO BE WITHHELD ON DISPOSAL OF IMMOVABLE PROPERTY BY NON-RESIDENT SELLERS
In transactions where the property value is more than R2 000 000,00, provisional tax is withheld on behalf of non-resident sellers of immovable property in South Africa which tax is then set off against the normal tax liability of the non-resident. The tax to be withheld from payments to the non-residents will with effect from 1 March 2017 be 7.5% (previously 5%) of the value of the property for a non-resident individual; 10% (previously 7.5%) for a non-resident company and 15% (previously 10%) for a non-resident trust.