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Transfer Duty vs Value Added Tax: If the Seller of immovable property is a registered VAT vendor, then VAT is charged on the purchase price of the property and Transfer Duty is not applicable (whether VAT is included in the purchase price is dependant on the wording of the contract). If the Seller is not registered for VAT, then Transfer Duty is payable. Transfer Duty is NOT included in the purchase price of the property. Capital Gains Tax: This tax is a tax you have to pay on the profits made from the sale of the assets. You are only liable for payment when you sell (dispose of) your asset. All taxpayers (including individuals) are taxed on the profit made from selling assets. The maximum effective rate of Capital Gains Tax is: - Individuals 13.33% - Companies 18.67% - Trusts (other than special trusts) 26.67% Capital Gain is calculated by deducting the Base Cost (market value of property on or after 1 October 2001) of the asset from the market value on the date of sale (Liabilities do not reduce the Capital Gain). Buying from a Non - Resident: A non-resident who disposes of immovable property in South Africa has to declare the sale in his/her SARS tax returns. Legislation came into effect on 1 September 2007 ensuring non-residents are also liable to pay tax on the sale of property.  Keeping your transfer on track! |
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