The term “duty transfer” in South African law can be a bit of a chameleon—it changes its meaning depending on whether you are talking about taxing a property sale, shifting contractual obligations, or moving employees to a new company.

If you’re looking for a clear-cut legal guide, here is a breakdown of the three most common ways “duty transfer” (or the transfer of duties) manifests in our legal system.

1. Transfer Duty: The Property Tax

The most common use of the phrase is Transfer Duty. This is a government tax levied by SARS whenever a property is acquired (unless VAT applies).

• Who pays? Legally, the purchaser is liable for this payment.
• The 2025/2026 Threshold: As of the latest budget, properties valued at R1,200,000 or less are exempt from transfer duty.
• The Timeline: It must be paid within six months of the date of acquisition (usually the date the Offer to Purchase is signed). If you miss this, SARS will charge you 10% interest per annum.
• The Process: A conveyancing attorney handles this. They must obtain a “Transfer Duty Receipt” from SARS before the Deeds Office will allow the property to be registered in your name.

2. Delegation: Transferring Contractual Duties

In general contract law, you cannot simply “give away” your duties. If you owe someone a service or a debt, South African law makes a sharp distinction between Cession and Delegation.

• Cession (Rights): You can transfer your rights (like the right to receive payment) to a third party without the debtor’s consent.
• Delegation (Duties): You cannot transfer your duties (the obligation to do something or pay someone) without the express consent of the person you owe (the creditor).

Legal Tip: If a contract says you can “assign” the agreement, in South Africa, this usually implies a combination of cession (rights) and delegation (duties). However, to be safe, a Tripartite Agreement is often signed where all three parties (the original two plus the new party) agree to the substitution.

3. Section 197: The Automatic Transfer of Employment Duties

Perhaps the most powerful form of “duty transfer” occurs in Labour Law. Under Section 197 of the Labour Relations Act (LRA), if a business is sold as a “going concern,” the employment duties transfer automatically.

Key Principles of Section 197:

• No Choice: The new employer must take over the employees on terms and conditions that are, on the whole, no less favourable than before.
• The “Going Concern” Test: For this to apply, the business must remain essentially the same but in different hands. If you just buy the desks and chairs (assets), it might not apply; if you buy the brand, the client list, and the operations, it definitely does.
• Continuity: The employees’ years of service remain intact. The new employer inherits all the “burdens” of the previous one, including pending disciplinary issues or unpaid leave.

Summary Table: Which Transfer applies to you?

Context	Legal Term	Key Requirement
Buying a House	Transfer Duty	Payable to SARS within 6 months.
Contractual Debt/Service	Delegation	Requires the Creditor’s consent.
Selling a Business	Section 197 Transfer	Automatic transfer of all employee duties.

A Note on VAT vs. Transfer Duty

One of the most common legal “traps” is assuming you always pay Transfer Duty. If the seller is a VAT Vendor and the sale is part of their business (like a developer selling a new unit), you pay VAT instead. You never pay both.

Selling your property and feeling overwhelmed by the legal fine print? Contact our expert legal team today to ensure your “duty transfers” are handled with precision, protecting you from unexpected SARS penalties.