Did you know that transfer duty on the sale of a share in a ‘residential property company’, as defined in the Transfer Duty Act, is determined in accordance with the value of the share(s) acquired?
For example, purchasing a 50% share for R500,000 in a residential property company where the fair market value of the entity’s property is R1 million, will not attract transfer duty as the value of the shares acquired is below the current threshold of R750,000. In contrast, should a 50% undivided share in a property valued at R1 million be purchased for R500,000, transfer duty will be payable as the duty is calculated as 50% of the duty leviable on a property worth R1 million.
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