20 Feb 2012
On 23 February 2011, the South African Finance Minister Pravin Gordhan, raised the transfer duty threshold by R100 000 to R600 000.
According to Lightstone, the 2011 adjustment also changed the ruling to allow juristic entities, i.e. trusts, CC’s and Pty Ltds to also benefit from the R600 000 transfer duty allowance.
Lightstone conducted a study of the impact of amendments to transfer duty in respect of property sales.
Hayley Ivins says in order to understand whether these adjustments had any impact on sales in the property market, they examined the frequency of property sales in the R500 000 to R600 000 price bracket in the six month period pre and post the date of implementation i.e. 23 February 2011.
She says they excluded those transactions that were directly from property developers as they do not carry transfer duty costs and portions of title shares.
The study also looked at sales to natural persons and juristic entities independently.
Results from the study revealed that property sales increased by 8 percent for natural persons.
Looking at people buying property in their personal capacity registered against their ID number at the Deed’s Office, the number of sales in the R500 000 to R600 000 band in the six month period prior to the transfer duty amendment was 6 378 and this rose to 6 879 in the six months post the adjustment, she points out.
In the case of juristic entities, the study identified a 36 percent lift in property sales between the R500 000 and R600 000 band in the six month period post the announcement, from 635 to 866 sales.
“This indicates that the adjustment served as an impetus for purchases in the names of juristic entities, in the price band exempt of transfer duty.”
Ivins adds that while they do not anticipate a further adjustment to the transfer duty value in Wednesday’s budget speech, the study results indicate that an increase in the minimum value for transfer duty appears to stimulate the appetite of buyers in the value band exempt from transfer costs.
About the Author
House for sale in Doornpoort R 1 099 000
House for sale in Naudeville R 435 000
House for sale in Perridgevale R 1 375 000
House for sale in Amandasig R 615 000
Vacant Land / Plot for sale in Morula View R 360 700
House for sale in Amandasig R 595 000
House for sale in Umhlanga Rocks R 7 600 000
House for sale in Eldorado Park R 385 000
Apartment / Flat for sale in Monument R 720 000
House for sale in Amandasig R 545 000
If you are using Internet Explorer 8 or higher, please verify that your Internet Explorer compatibility view settings are not enabled.
For the best browsing experience update to the latest Version of Internet Explorer or try out Google Chrome or Mozilla Firefox.
Please contact our Customer Service Centre for further assistance. Tel. +27 (0)861 111 724