It often happens that when purchasers buy a property (especially first time buyers) they are unaware of the extent of the costs associated with the transfer of the property into their names as well as the costs associated with the registration of a bond (if applicable). Here are some important factors to consider before purchasing a property:
As of 1 March 2016 – 28 February 2017 the amount of Transfer Duty payable to SARS on the purchase of a property is as follows:
R0 – R750 000 0%
R750 001 – R1 250 000 3% of the value above R750 000
R1 250 001 – R1 750 000 R15 000 + 6% of the value above R 1 250 000
R1 750 001 – R2 250 000 R45 000 + 8% of the value above R 1 750 000
R2 250 001 – R10 000 000 R85 000 +11% of the value exceeding R2 250 000
R10 000 001 and above R937 500 +13% of the value exceeding R10 000 000
Transfer Duty (or costs of any sort) cannot be financed through a bond and so the Purchasers must have these funds available for payment before the property can be transferred into their names.
The Attorney attending to the transfer of the property into the purchasers’ names (The Conveyancer) is entitled to charge a fee to do so according to a tariff as recommended by the Law Society of South Africa. The Attorneys attending to the registration of the bond are also entitled to charge a fee as per the tariff. On a property transfer of R2 000 000.00 for example, the transfer fees would be R25 650.00 (vat inclusive) and the bond registration (of R2 000 000.00) the fees would be R25 650.00 (vat inclusive). That is quite a hefty amount of money if one has not made provision for it.
Other costs for the Purchasers’ Account:
Over and above the Transfer Duty and the Attorneys fees there are other costs associated with the transfer such as: (but not an exhaustive list) a clearance certificate fee from the local municipality, the fee from the Home Owner’s Association or Body Corporate (if applicable) for the issuing of a clearance certificate and rates and taxes payable in advance.
The best advice we can offer purchasers therefore is obtain a quote for all costs associated with the transfer and registration of the bond BEFORE signing the offer to purchase. Brosens Cochrane Inc would be happy to assist in this regard. Please pop us an e-mail (email@example.com or give us a call on 087 230 8484 for a free no obligation quotation.
Brosens Cochrane Inc