Youth and women buyers to benefit from higher transfer duty threshold

Published March 2025

Young first-time buyers and single women are among those who will benefit most from the government’s decision to increase the transfer duty threshold, says Bradd Bendall, BetterBond’s National Head of Sales. 

“The adjustment of the transfer duty threshold from R1.1 million to R1.21 million may seem like a marginal change, but it will have an impact on affordability and buyers’ ability to invest in property. It will particularly have an impact on younger buyers who may not have the financial capacity to pay transfer duties and also save for a deposit before applying for a bond.”

The current average age of first-time buyers, according to BetterBond’s data, is 37. A few years ago, the average age was around 33, which shows that potential buyers are waiting longer to buy a home as they work on consolidating their finances before committing to bond repayments, adds Bendall. “Affordability is one of the reasons why many South Africans are taking longer to buy their first home, with many opting to rent until they are in a position to afford the hefty transfer duties associated with a bond.” 

According to the Absa Homeowner Sentiment Index, first-time buyers are more positive than other segments about the future of South Africa’s property market. As a result, the percentage of potential buyers who would rather buy than rent increased by 4% to 77% for the period under review. Interestingly, the Index also notes that in the last quarter of 2024, more single women are among first-time buyers. A higher transfer threshold will count in these buyers’ favour, making it possible for more women to also enter the property market. 

With the adjusted threshold, buyers will only need to pay a transfer duty of upwards of R3 300 if they buy a home of R1 210 001 or more. Transfer duty is the tax levied on immovable property and it can add significantly to the overall cost of a new home. It is calculated progressively on a sliding scale so for instance, on a property valued between R1.21 million and R1 663 800, the buyer will pay 3% on the portion exceeding R1.21 million. The rates increase as the property value rises, with higher-value properties subject to higher transfer duty percentages, says Bendall. 

The transfer duty adjustment will provide welcome impetus to first-time buyer activity, which has already shown significant improvement during the first two months of the year. While overall house prices dropped by 0.5% year on year, as reported in BetterBond’s latest March Property Brief, house prices for first-time buyers increased by 2.5%. This points to the considerable demand in this important segment of the market. Over the past five years, prices have increased at an annual rate of 5.5% for all buyers, and by 6% for first-time buyers – well above inflation. 

For buyers looking to maximise their purchasing power, understanding where affordability stretches further across the country is key – as highlighted in The provinces where first-time homebuyers get more bang for their buck.