Author: Tarryn Jason
Jason Attorneys Inc.
Transfer Costs Involved When Buying And Selling A Property
If you have not bought or sold a property before, or for that matter, bought/sold many years ago, this article serves to forewarn you against all the costs included and the reasons why same are charged.
In any one transfer, usually three different conveyancers are involved, namely, the bond cancellation attorneys (i.e. the attorneys that cancel the seller’s bond over the property), the transferring attorney (i.e. the attorney appointed by the seller to perform the transfer of ownership of the property in question from the seller to the purchaser), and, the bond registration attorneys (i.e. the attorneys that register the new bond over the property being transferred). Of course, this depends on the circumstances and should there not be a bond to cancel, or the property is bought cash, this will apply accordingly.
Why three different attorneys you ask?
Whenever a transaction includes a bank, the bank (because it is the entity holding the bond and taking the risk for lending such money) appoints an attorney on its panel of attorneys. Said attorneys need to meet stringent requirements to qualify to be on the bank’s panel due to the fact that, once on such panel, those attorneys act as direct representatives of the bank in question.
Bond cancellation fee:
Bond cancellation costs are borne by the seller and are usually in the region of R4,500.00 (FOUR THOUSAND FIVE HUNDRED RAND). These attorneys are chosen from the bank’s panel where the seller’s bond is. Other disbursements include Deeds Office fees, Stordoc fees, Postages and Petties, and the Electronic Facilitation fee (all included in the amount above).
Bond registration fee:
Bond registration costs are borne by the purchaser and the fee amounts to roughly the same as the fee for transferring the property as per the Conveyancing Guidelines of the Law Society. This is calculated based on the value of the property.
There are usually additional fees charged known as the Initiation Fee (a disbursement paid to the bank for the initiation of the bond that is registered over the property to be purchased), a FICA fee, and similar disbursements as mentioned above for bond cancellation (i.e. Deeds Office fee, Postages and Petties, Electronic Facilitation fee).
Registration of ownership fee (Transferring fee):
Transferring fees are also worked out based on the abovementioned link (Conveyancing Fee Guidelines) and vary dependent on the value of the property. In addition to this, Transfer Duty is charged, along with certain other disbursements such as a FICA fee, Deeds Office Search and Registration fees, Rates Clearance Certificate fee, Lodgement fee and Electronic Document Generation fee.
One is often confused with Transfer Duty fees and it must be stressed that this is not a fee owed to the transferring attorney but a disbursement owed to the South African Revenue Service (SARS). It is also calculated based on the value of the property on a sliding scale. The first R1 000 000 is exempt. [see link to SARS table of Transfer Duty costs – below]
Sellers also need to bear in mind that they must, usually as a condition to the Deed of Sale of a normal sale (i.e. sale by private treaty), bear the costs involved for the issue of Compliance Certificates regarding the house (i.e. Electrical, Beetle, Plumbing, Electrical Fence, and Gas, the latter two usually not always applicable). This would include any repairs to have the said certificate issued. Compliance Certificates are not usually a condition to the Deed of Sale when the property is sold by public auction. In such instance, the Compliance Certificates are for the purchaser’s expense.
Furthermore, if one makes use of the services of an estate agent to procure a buyer, the seller will be responsible for the estate agents commission. Properties sold via public auction usually require the purchaser to pay the auctioneers commission over and above the amount that the property was purchased for (e.g. Property bought for R1,000,000.00; purchaser must pay an auctioneers commission of 10%, this means the purchaser must pay the auctioneer R100,000.00 over and above the R1,000,000.00 paid for the property).
Please be advised that the above is a basic guideline and may vary according to the circumstances of each transaction. For more information on costs and a free quote on transferring fees, please do not hesitate to contact me via the contact form below.
The original article by Jason Attorneys Inc. can be viewed here:
SARS Table of Transfer Duty: