Costs when buying property
Category News
Time to buy, but before you do, be sure you know what you are in for in terms of the transaction costs. This needs to be paid upfront in cash before you can take transfer of the property into your own name.
Seeff’s agents highlight some of the important costs.
Buying a new property involves various costs which you will need to budget for. Primary amongst these, would be the transaction costs which include transfer and bond registration fees. Buyers should however, also budget for moving and other costs to set-up their new home.
The transaction costs include:
(a) Costs which the buyer needs to pay:
Transfer duty – the first R900,000 of the purchase price is exempt from transfer duty. Thereafter, a sliding tariff scale applies. Transfer duty is a tax which is paid to government.
Bond registration – if you take a mortgage loan to finance your property purchase, a bond will need to be registered over it at the same time that the property is transferred into your name and this also attracts a cost.
Attorneys fees – there will also be fees payable to the transferring and bond registration attorneys. This is also based on a fixed scale of fees.
Deposit – if there is a deposit required, usually around 10%-20% of the purchase price, this will also need to be lodged upfront with the transferring attorneys.
(b) Costs paid by the seller:
Bond cancellation fees – if there is a bond on the property that needs to be cancelled and settled from the proceeds of the sale, there will also be a cost involved which is usually deducted from the sales price, or if insufficient, needs to be paid upfront.
Estate agents commission – commission on the sale of the property is usually agreed upon and recorded in the agreement of sale. It is usually paid from the proceeds of the sale, but in the event of a shortfall, will need to be paid in cash upfront before the transfer can be effected.
Compliance costs – various compliance inspections and certificates are required and these will be for the seller’s account. Again, if there is insufficient funds available from the sale, it will need to be paid in cash upfront.
Author: Seeff
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