People & News

Stamp duty to go - 2004 Budget speech

Extract from the Budget Speech

"Transfer duty
The South African housing market has seen a notable recovery since 2000. To facilitate the acquisition of houses in the lower end of the housing market, we are raising the exemption threshold for transfer duty to R150 000 from the beginning of next month.

Stamp duties on mortgage bonds and NCDs
To assist homebuyers further, stamp duties on mortgage bonds will be removed from 1 March 2004, as this constitutes a second levy in addition to the transfer duty. This will cost R250 million. Stamp duty on negotiable certificates of deposit will also be repealed, with effect from 1 April, thereby completing the removal of stamp duty on all debt instruments. Simultaneously, measures to prevent avoidance of duties on leases will be introduced."

Proposed rates of transfer duty

Property Value Rates of tax
R0 - R150 000 0%
R150 001 - R320 000 5% on the value above R150 000
R320 001 and above R8 500 plus 8% on the value above R320 000

By way of comparison last year's rates were the following:

Property Value Rates of tax
R0 - R140 000 0%
R140 001 - R320 000 5% on the value above R140 000
R320 001 and above R9000 plus 8% on the value above R320 000

Notes on Stamp duty
Based on our example above the removal of Stamp duty on a bond of R150 000 and one of R320 000 would save the homeowner R320 and R640 respectively.

Companies, Close Corporations and Trusts etc have not benefited and will still attract transfer duty at the rate of 10% of the price.

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