When must transfer duty be paid?

In terms of the Transfer Duty Act 14 of 1993, transfer duty must be paid, at the latest, within six months after the date of acquisition of the property. Accordingly, even if transfer has not been registered within six months after the date of the sale of the property, transfer duty must be paid to avoid penalties.

Transfer duty is payable on the value of a property, i.e., the purchase price in the case of a sale. It constitutes fraud, and a contravention of the code of conduct, to enter into a disguised contract of sale at a price lower that the actual price for which the property is sold, in order to avoid transfer duty. An estate agent must therefore keep this in mind should an agreement of sale be concluded on the basis that the purchaser is to pay commission. In practice, however, this normally does not arise since contracts of sale usually state that the seller is liable for payment of commission.

In the event that a company or a close corporation acquires property, the normal transfer and stamp duties apply. When the purchaser is a natural person (or a partnership), transfer duty is currently calculated as follows:

(a) 1% of the purchase price up to N$ 100 000
(b) 5% of the purchase price over N$ 100 000 and up to N$ 400 000; and
(c) 8% of purchase price exceeding N$ 400 000.
(Note that these rates are changed periodically).

In the following instances, no transfer duty is payable if a natural person acquires a property:

(a) when the property consist of land and any dwelling thereon, or is a unit in terms of the Sectional Titles Act, and the value of the property does not exceed N$ 100 000; or
(b) the property is unimproved land which is acquired to build a dwelling on it, and the value of the land does not exceed N$ 24 000.

How to calculate transfer duty:

Transfer duty is calculated for natural persons at 1% on the first N$100 000; 5% on the balance up to N$400 000; and 8% on the balance over N$400 000.
Transfer duty must be paid to the Receiver of Revenue.

( Useful Information when buying a house )

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