In his Budget Speech on 20 February 2002 the Minister of Finance proposed certain amendments, to the Transfer Duty Act, 1949 (the Act). The amendments will be dealt with in the Revenue Laws Amendment Bill, 2002, later this year.
Following the Minister˙s Budget Speech, the rates of Transfer Duty for natural persons have been revised. The following new rate will be applicable to property acquired on or after 1 March 2002:
| Value of Property | Rate of Duty |
| R0,00 - R100 000 | 0 % |
| R100 001 - R300 000 | 5 % of value above R100 000 |
| R300 001 and above | R10 000,00 plus 8 % of the value above R300 000 |
The rates for low value properties have been built into the new rates, which will apply to all property and not only property for residential purposes. The amended rates came into effect on 1 March 2002. As from 1 March 2002, a declaration as to the use of the property will no longer be required for property transactions.
The rate of 10 % applies if the person acquiring the property, is a person other than a natural person, such as companies, closed corporations, trusts, etc.
SARS is aware that some buyers of fixed property have sought to cancel agreements entered into before 1 March 2002 and entered into new agreements to take advantage of the lower transfer duty rates. SARS wishes to point out that the [then Appelate Division] in the case of Secretary for Inland Revenue v Hartzenberg (1966(1) SA 405 (AD)) found that where there is not effective cancellation of the original agreement, the liability for transfer duty occurs as a result of the entering into of the original agreement.
The fraudulent alteration or substitution of contracts of sale concluded before 1 March 2002 with contracts purporting to be concluded on or after that date in order to take advantage of the reductions in transfer duty is viewed in a serious light and will lead to prosecution.
ISSUED BY THE COMMISSIONER FOR THE SOUTH AFRICAN REVENUE SERVICE
PRETORIA
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