The national budget for 2011 was announced at the end of February and one thing of particular interest were the changes to the amount of Transfer Duty payable when buying a property.
Transfer duty is now applicable to all sales exceeding R600 000, as opposed to the previous R500 000, as well as other favourable reductions in calculating the amount of Transfer Duty to be paid.
From 23 February 2011 the following will apply:
No Transfer Duty will be paid on property with a value below R600 000;
For property values of R600 001 up to R1 million, the rate of Transfer Duty is 3%, down from the previous 5%;
Property costing more than R1 million, the rate will be R12 000 plus 5% of the value between R1 million and R1.5 million;
Property values exceeding R1.5 million, rates will be R37 000 plus 8% of the value above.
This means that if you were buying for R1.3 million, your transfer duty would be R27 000 as opposed to R49 000, saving you R22 000.
Buying for R2 million, Transfer Duty will be R77 000, a saving of R28 000 from the previous figure of R105 000.
What is of particular interest in this years changes, are the fact that these figures now apply to companies and trusts too, whereas before their figures were different.
Having this reductions means owning your own home has become more affordable.
Contact us for further information.