Although the calculation of transfer duty in respect of transactions with a property value under R10 million has not been affected, a further tax bracket has been implemented in respect of the transfer duty rate on the portion of the property value above R10 million, which will increase from 11% to 13%.
With effect from 1 March 2016, transfer duty will therefore be payable at the following rates on transactions which are not subject to VAT:
Transfer duty payable in respect of property transactions where the underlying agreements were concluded on or after 1 March 2016 will therefore be subject to the new transfer duty provisions and will be calculated as per the above table.
Agreements concluded prior to 1 March 2016 will therefore still be subject to the calculation of transfer duty based on the previous tax dispensation, notwithstanding that the date of fulfilment of suspensive conditions in terms of such agreements, or the registration of the transfers of the properties under those agreements may occur after 1 March 2016.
The Minister stated that higher capital gains inclusion rates and measures to strengthen the estate duty and donations tax are also proposed.