Changes with effect from 1 March 2005



Transfer duty The purchase of fixed property is subject to transfer duty on a sliding scale when bought by natural persons and at a fixed rate of 10 per cent for properties acquired by juristic entities. In the case of fixed property bought by natural persons, the first R150 000 is not subject to transfer duty. Given the steep increases in property prices during the last few years, it is proposed to increase the exempt threshold from R150 000 to R190 000 and the second threshold from R320 000 to R330 000 with effect from 1 March 2005. Proposed rates of transfer duty, 2005/06 Property value Rates of tax R0 - R190 000 0% R190 001 - R330 000 5% on the value above R190 000 R330 001 and above R7 000 plus 8% on the value above R330 000 Page 10 The proposed new duty rate structure will reduce the tax burden on a property transaction of R320 000 by R2 000. This proposal will result in a revenue loss of R450 million. Current and proposed transfer duty Property value Current % of Proposed % of duty value duty value R180,000 R1,500 0.8% R0 - R250,000 R5,000 2.0% R3,000 1.2% R320,000 R8,500 2.7% R6,500 2.0% R350,000 R10,900 3.1% R8,600 2.5% R500,000 R22,900 4.6% R20,600 4.1% R750,000 R42,900 5.7% R40,600 5.4% R1,000,000 R62,900 6.3% R60,600 6.1% Refer to Budget Guide 2005 - www.sars.gov.za