# Do you pay transfer duty when buying from a developer in South Africa? - Canonical URL: https://bond.co.za/guides/transfer-duty-vs-vat-developer-south-africa - Author: Neil B - Published: 2026-11-10 - Last updated: 2026-11-10 1. [Home](https://bond.co.za/) 3. [Guides](https://bond.co.za/guides) 5. [Costs & fees](https://bond.co.za/guides/costs-and-fees) 7. Transfer duty vs VAT on a developer purchase Costs & fees bond.co.za's answer: usually no. A new unit sold by a VAT-registered developer carries **15% VAT** in the price instead of transfer duty — the two taxes never apply together. The same R1 500 000 bought as a resale would cost **R8 700** in duty; from a VAT-registered developer, duty is **R0**. - Why: transfer duty and VAT are mutually exclusive on one property sale — if the transaction is subject to VAT, no duty is levied on it. - The catch: it depends on the seller, not on your preference. A small builder who is not VAT-registered sells on normal transfer-duty terms. - Check the contract: a price “exclusive of VAT” grows by 15% at signature — R1 500 000 exclusive becomes R1 725 000 inclusive. - No duty does not mean no costs: conveyancing attorney and [bond registration costs](https://bond.co.za/guides/bond-registration-costs) still apply. By [Neil B](https://bond.co.za/expert) · Checked against published primary sources · Published 2026-11-10 · Last verified 2026-11-10 [Calculate your transfer costs](https://bond.co.za/transfer-cost-calculator)[See what you could qualify for](https://bond.co.za/#qualify) Duty table: South African Revenue Service (SARS), effective 2026-04-01Verified 2026-09-06Not legal or tax advice ## The Complete Home Buyer Cost Checklist Every upfront cost on a South African home purchase — transfer duty (or VAT), attorney fees, Deeds Office fees, the bank's initiation fee — who charges it and when it is due, in a printable PDF. ### Get the Complete Home Buyer Cost Checklist A printable PDF checklist of every upfront cost, who charges it, and when it is due — so nothing catches you off guard. Free to use. bond.co.za is an independent educational resource — we do not provide credit, origination, legal or conveyancing services. [About our independence](https://bond.co.za/how-we-make-money). ## Why is there no transfer duty when you buy from a developer? **Because a property sale cannot carry transfer duty and VAT at the same time. When the seller is VAT-registered and the sale is subject to VAT under the Value-Added Tax Act, 1991, the Transfer Duty Act does not levy duty on that transaction — the 15% VAT inside the price fully replaces it.** SARS states the position plainly on its transfer duty page: no transfer duty is payable on VAT-inclusive sales from registered developers. This is why the rule follows the seller, not the property. A developer selling brand-new units is almost always a VAT vendor — VAT was charged on the construction materials and labour, and the sale passes it on. An individual selling their second-hand home is not a VAT vendor, so the ordinary transfer duty table applies instead. Same street, same price band, two different taxes — decided entirely by who is selling. ## When do you pay transfer duty on a developer purchase? **You pay normal transfer duty whenever the sale is not subject to VAT — most commonly when the seller is not VAT-registered.** The two situations buyers actually run into: - **A small builder or individual seller who is not VAT-registered.** Registration is compulsory only above the VAT threshold, so a smaller operator can legally sell new property without charging VAT — and that sale is an ordinary transfer-duty transaction, worked out on the SARS table. - **Any resale, of any age of property.** The VAT treatment applied once, to the first sale from the developer. When that unit is sold again — a year later or ten years later — the new buyer pays transfer duty like any other second-hand purchase, unless the price is at or below the duty-free threshold. One practical wrinkle: buying off-plan or during construction does not change the rule — what matters is the VAT registration status of the seller on the sale, which the offer to purchase and the conveyancer confirm before transfer. If you are sizing up the full cash-to-close bill on a new development, the [transfer and bond costs](https://bond.co.za/guides/transfer-and-bond-costs) guide breaks the remaining lines down by price band. ## VAT vs transfer duty: what the same price costs each way **On a VAT-registered developer sale the duty line is always R0 — the VAT sits inside the negotiated price. On an ordinary resale of the same value, the SARS duty applies.** The table computes the resale duty straight from the SARS table effective 2026-04-01 (verified 2026-09-06); the developer column shows the VAT content inside a VAT-inclusive price. Transfer duty on a resale vs VAT inside a developer sale, by purchase price | Purchase price | Ordinary resale: SARS transfer duty | VAT-registered developer sale: transfer duty | | --- | --- | --- | | R850 000 | R0 — below the duty-free threshold | R0 — VAT of about R110 870 is inside the price | | R1 500 000 | R8 700 | R0 — VAT of about R195 652 is inside the price | | R2 000 000 | R33 786 | R0 — VAT of about R260 870 is inside the price | | R3 000 000 | R107 356 | R0 — VAT of about R391 304 is inside the price | Duty figures are calculated from the SARS transfer duty table effective 2026-04-01, source: [www.sars.gov.za/tax-rates/transfer-duty/](https://www.sars.gov.za/tax-rates/transfer-duty/). VAT content = price × 15/115. Illustrations only — confirm your own transaction with your conveyancing attorney. Read the table the practical way: the difference is not a saving you engineer — it is a fact about who is selling. What you can control is everything else in the cash-to-close stack. Run your own price through bond.co.za's [transfer cost calculator](https://bond.co.za/transfer-cost-calculator) or model duty plus bond fees together in the [bond and transfer cost calculator](https://bond.co.za/bond-and-transfer-cost-calculator). ## Check the contract: is the price VAT-inclusive or VAT-exclusive? **On a new development, always establish which one you are signing — it is the single most common surprise in developer purchases.** A marketed “R1 500 000” that turns out to be VAT-exclusive becomes R1 725 000 once 15% VAT is added — an extra **R225 000** on the same unit. A VAT-inclusive price is final: the VAT is already inside it, and nothing is added at transfer. Developers market both ways, and marketing material is not the contract. The offer to purchase should state the VAT treatment explicitly, and the conveyancing attorney confirms it before transfer. If the numbers in your bond application were run on the exclusive figure, your deposit and loan size need to cover the VAT-inclusive total — a gap worth closing before you sign, not after. ## Who pays the transfer duty in South Africa? **The buyer pays transfer duty — it is a tax on acquiring property, charged to the purchaser and payable within six months of acquisition, cash or bond-financed.** In practice the conveyancing attorney collects it from the buyer and lodges it with SARS; the Deeds Office will not register the transfer without the duty receipt. On a VAT-registered developer sale there is simply no duty to pay — which is why the attorney's account on a new development shows attorney and Deeds Office fees but no duty line. The full mechanics — who pays, when, and the complete 2026/27 SARS bracket table — live in our [transfer duty](https://bond.co.za/guides/transfer-duty) guide; this page covers only the developer-and-VAT corner of it. ## Why would a house have no transfer duty? **Three reasons a South African property sale carries no transfer duty: the price is at or below the R1 210 000 duty-free threshold, the sale is subject to VAT because the seller is VAT-registered, or the transfer falls under a statutory exemption.** The statutory exemptions are narrow — transfers to heirs from a deceased estate and certain transfers between spouses under a divorce order — and the conveyancer confirms each one against the Transfer Duty Act before lodging the transfer. “No transfer duty” in a development advert almost always means the second reason: you are buying new from a VAT vendor. It is a legitimate feature of the sale — but remember the price carries the VAT instead, and the buyer's other costs (attorney, Deeds Office, bond registration) are unchanged. Some products can fold part of those costs into the loan for qualifying buyers — the [costs-included home loan](https://bond.co.za/guides/costs-included-home-loan) guide explains how. ## Sources and assumptions in this guide Transfer duty figures are computed from the SARS transfer duty table effective **2026-04-01**, published by the South African Revenue Service (SARS) and verified 2026-09-06; SARS notes on that page that no transfer duty applies to VAT-inclusive sales from registered developers. The either/or relationship between transfer duty and VAT on one property transaction follows from the Transfer Duty Act, 1949 and the Value-Added Tax Act, 1991; this guide does not restate section text — your conveyancing attorney confirms the treatment of your specific sale. Every worked figure is an illustration of the statutory framework, not a quote, offer or tax ruling. Developer pricing, VAT-inclusive or otherwise, is a matter between you, the seller and the conveyancer, and nothing here is legal, tax or financial advice. ### Price up your own purchase, both taxes aside Two questions, no contact details — an estimated bond range and repayment at today's prime. Roughly what price range are you looking at? Are you buying new from a developer, or a resale property? FAQ ## Transfer duty vs VAT on a developer purchase: FAQs Do you pay transfer duty when buying from a developer in South Africa?+ Usually not. When the developer is VAT-registered and sells the unit subject to VAT, the sale carries 15% VAT inside the price and no transfer duty — the two taxes never apply to the same transaction. The exceptions: a small builder who is not VAT-registered sells you a normal transfer-duty transaction, and if you later resell the property, your buyer pays duty on that resale in the ordinary way. What are the exemptions from transfer duty in South Africa?+ The main routes to zero transfer duty are: a property valued at R1 210 000 or below (0% rate), a sale subject to VAT by a VAT-registered seller such as a developer, transfers to heirs from a deceased estate, and certain transfers between spouses under a divorce order. The full SARS table and each route are covered in the transfer duty guide. Who pays the transfer duty in South Africa?+ The buyer pays. Transfer duty is a tax on acquiring property, so SARS charges the purchaser whether the purchase is cash or bond-financed, and it is payable within six months of acquisition. In a new development the developer does not pay your duty — there is no duty to pay; the VAT is already inside the purchase price you agreed to. Why would a house have no transfer duty?+ Three common reasons: the price falls at or below the R1 210 000 duty-free threshold; the seller is VAT-registered — typically a developer selling a new unit — so VAT replaces duty; or the transfer is a statutory exemption, such as an inheritance from a deceased estate or a transfer between spouses under a divorce order. Is VAT more expensive than transfer duty on a new development?+ It can look that way, but the comparison is misleading: a buyer does not choose between the two. The seller’s VAT registration decides. On a R1 500 000 VAT-inclusive developer sale, about R195 652 of the price is VAT and duty is R0. On a R1 500 000 resale, duty is R8 700 but the seller is an individual who cannot charge VAT at all. What you control is the negotiated price and the other transfer costs, not which tax applies. Do I pay transfer duty on a plot or stand bought from a developer?+ The same either/or rule applies: if the seller of the stand is VAT-registered and the sale is subject to VAT, the purchase carries VAT and no transfer duty; if the seller is not VAT-registered, transfer duty applies per the SARS table, with the first R1 210 000 of the value duty-free. Confirm which applies with the conveyancing attorney before you sign the offer to purchase. ## Informational disclaimer This guide is for information only and is not legal, tax or financial advice. Transfer duty figures are computed from the SARS table effective 2026-04-01 and change when SARS revises the table; VAT is charged at 15% unless the rate changes. Whether a specific sale carries VAT or duty depends on facts this page cannot see — the seller's VAT registration and the terms of your offer to purchase. Always confirm the treatment of your transaction with your conveyancing attorney before signing. Nothing here guarantees an approval, a rate or a tax outcome. Last updated: 2026-11-10. Transfer duty data last verified 2026-09-06. Next review expected when SARS revises the transfer duty table or the VAT rate changes. Keep reading ## More in costs & fees The most recently updated guides in this category. [Costs & fees](https://bond.co.za/guides/costs-and-fees) [Rates clearance certificate in South Africa: who pays, and how long it takes](https://bond.co.za/guides/rates-clearance-certificate-south-africa) The municipality’s certificate that rates and service charges for the two years before transfer are paid — required under the Municipal Property Rates Act before the Deeds Office can register, and usually the seller’s cost. Updated 02 Nov 20267 min read [Costs & fees](https://bond.co.za/guides/costs-and-fees) [Costs included in a home loan: what can be financed](https://bond.co.za/guides/costs-included-home-loan) A standard South African bond covers the purchase price only — but the bank initiation fee can be added to the loan, some lenders lend above 100% to absorb upfront costs, and transfer duty can never be financed. Updated 27 Oct 20266 min read [Costs & fees](https://bond.co.za/guides/costs-and-fees) [Home loan insurance requirements](https://bond.co.za/guides/home-loan-insurance) South African bonds require two kinds of cover: homeowners insurance for the building and credit life as a bank condition — with premiums capped by regulation and your right to use your own insurer. Updated 20 Oct 20267 min read [Browse all costs & fees guides →](https://bond.co.za/guides/costs-and-fees) Know the full cost before you sign ## Budget the whole purchase, duty or VAT included Work out what you could borrow, then see the full cash-to-close bill on your own price before you make an offer. [Check what you could qualify for](https://bond.co.za/#qualify)[Calculate your transfer costs](https://bond.co.za/transfer-cost-calculator) > This is the Markdown version of [https://bond.co.za/guides/transfer-duty-vs-vat-developer-south-africa](https://bond.co.za/guides/transfer-duty-vs-vat-developer-south-africa); that HTML page is the canonical version of this content.