Buying a house should be a marvellously wonderful experience. If it’s your first house, then it is likely the first big investment you are making towards your future and your excitement is running high. Beware, however, of the hidden and not so hidden costs that are involved with home purchases – things like spending money on moving, structural issues, levies, insurance, and bond fees. The two that are often confused are transfer fees/costs that always have to be paid and transfer duties that have to be paid sometimes.
This is an additional cost above and beyond the price of the house that is payable to SARS when a property is transferred from one owner to another. The amount is calculated on either the purchase price of the property or the value of the property depending on which one is higher. The higher value will put you into a percentage band that will determine the final amount payable. From the 1st of March 2020, any property purchased at a value of R1 000 000 or less is exempt from paying transfer duties, hence the rate at which you pay this tax is 0%. For a property with a value of R1 380 000 for example, the transfer duty is R11 250 plus 6% of the value above R1 357 000. Below is a handy table of the transfer duty calculations:
|Value of the property (R)
|1 – 1 000 000
|1 000 001 – 1 375 000
|3% of the value above R1 000 000
|1 375 001 – 1 925 000
|R11 250 + 6% of the value above R1 375 000
|1 925 001 – 2 475 000
|R44 250 + 8% of the value above R1 925 000
|2 475 001 – 11 000 000
|R88 250 + 11% of the value above R2 475 000
|11 000 001 and above
|R1 026 000 + 13% of the value exceeding R11 000 000
If the property you purchase is subject to transfer duties, you are required to pay the calculated amount to SARS within 6 months of the sale date. If this is not done within the allotted time, you will be subject to penalties. The conveyancing attorneys will handle the payment, but this payment has nothing to do with their transfer fees.
Unlike transfer duties, this is an additional cost above and beyond the price of the house, that always has to be paid to the attorneys handling the administrative tasks of the purchase. The total amount payable is also dependent on the value of the property and thus varies from purchase to purchase. The Legal Practice Council (formerly known as the Law Society) does provide a guideline as to the fees payable to the transferring and bond attorneys, but the disbursements (for example postage and petties, document generation fees, rate clearance costs) are at the discretion of the attorneys and may vary.
Bond fees are for the registration of a bond in your name (buyer). If the seller still had an active bond, then there will be a fee to cancel the bond.
It is important when selling or buying a home to involve attorneys that will transfer ownership efficiently and with transparency. AED Attorneys does just that as they ensure that a property is handled with care as quickly as possible. With their in-house conveyancing team and transparent dealings, your property is in the best hands possible.
AED Attorneys understands that every situation is unique, and although they strive to ensure that the information contained herein is accurate at the time of publishing, it cannot be guaranteed to be without errors or omissions. As a result, AED Attorneys, its employees, independent contractors, associates or third parties will under no circumstances accept liability or be held liable for any innocent or negligent actions or omissions in this article, which may result in any harm or liability flowing from the use of or the inability to use the information provided.