5 November 2026
Buying
04 Mins

Buying in a new development: VAT, transfer duty and delays

If you buy a new home from a developer who is registered for VAT, you normally pay VAT at 15% instead of transfer duty. A sale cannot attract both. The VAT is usually already inside the developer’s price, but you must check the offer to be sure.

VAT or transfer duty: only one applies

VAT is a tax on goods and services. A seller who is registered as a VAT vendor charges it on the sale of a property at the standard rate of 15%. A sale that carries VAT is exempt from transfer duty, the tax you normally pay when property changes hands.

If the seller is not a VAT vendor, transfer duty applies instead. That can happen in a new development, for example when you buy a unit from an investor who is reselling. So ask one plain question before you sign: is the seller a VAT vendor, and is the price shown with or without VAT?

Transfer duty is calculated on a sliding scale. Nothing is payable up to R1 210 000, and the rate rises in bands from there. You can see what your purchase would cost with the transfer duty calculator, and read more in transfer duty explained.

Costs that still apply

Skipping transfer duty does not make the purchase free of costs. You still pay:

the transfer attorney’s fees, which are not fixed by law and differ between firms;
Deeds Office fees, which are set by a published schedule;
bond registration costs, if you are financing the purchase with a home loan;
any deposit the developer asks for, and the usual moving and setting-up costs.

Developers often name their own transfer attorneys. That is common practice, but ask for a written estimate of the fees and compare it with the transfer costs calculator.

What to check in the offer

Buying off a plan means you commit before the home exists, so the paperwork matters more than usual. Look for these points:

The price and what it covers. Is VAT included? Are fittings, appliances, parking bays and storage included, or are they extras?
The completion date. Is there a firm date, or a vague estimate? What happens if the date is missed?
Suspensive conditions. A condition such as bond approval must be met by a set date, or the deal can fall away. See suspensive conditions explained.
Where your deposit sits. It usually goes into an attorney’s trust account, but that is what the agreement says, not a general rule. Ask who holds it and who gets any interest.
Occupation before transfer. If you move in before registration, you will usually pay occupational rent, which is rent paid to the owner for living there. The amount and start date should be in the agreement.
The levies. Most new developments are sectional title or in an estate. Ask what the levy will be, and whether the developer controls the body corporate for now. Our guide to buying sectional title lists what to ask.

Your rights against a developer

A developer sells in the ordinary course of business. That means the Consumer Protection Act applies to the sale, including its rights to goods of good quality. A blanket voetstoots clause (the “as is” clause) does not remove those rights. A developer can sell something in a particular condition only if you were told about it plainly and accepted it. Read voetstoots and latent defects for how the clause works with private sellers.

A developer who sells its own stock also counts as a property practitioner. That brings duties such as providing a signed mandatory disclosure form before you make an offer. Ask for it.

Planning for delays

No law sets a standard time for building or for transfer. Building can run late because of weather, material supply, municipal approvals or the developer’s finances. Transfer can only be registered once the unit is complete and the necessary certificates and clearances are in place.

Keep your housing arrangements flexible. Do not give notice on your lease until you have a confirmed handover date.
Ask your bank how long its approval stays valid, and what happens if the build runs past that date.
Check what the agreement says about interest on the money you have paid, and about your right to cancel if the delay becomes long.
Budget for rent or a bond on your current home to continue for a few extra months.

When the unit is ready, inspect it carefully and write down every fault on a snag list, which is a list of defects for the developer to fix. Do this before you accept handover, and keep a dated copy.

What to do next

Ask the developer for the full offer, a written cost estimate and the VAT position before you commit. Run the numbers in the affordability calculator, then browse properties for sale to compare new homes with existing ones.

This article is general information for South African readers, not legal, financial or tax advice. Rules and rates change, so check your own situation with an attorney, your bank or a tax practitioner. Our property calculators can help you work out the numbers.