Transfer Duty and Hidden Costs

When purchasing a property, the principal cost is obviously the purchase price, which may or may not include Value Added Tax. If the Seller is a registered VAT vendor and the property is being sold as part of stock in trade, VAT of 14% will be included in the purchase price. In the event that the transaction does not include VAT, Transfer Duty* will be payable by the Purchaser.

  • Transfer duty is calculated as follows:

0 % on the first R600 000 of the purchase price

3% on the following R400 000 (R12 000)

5% on the following R500 000 (R25 000)

8% on the balance of the purchase price above R1.5million

  • The attorney who has been appointed as the conveyancer, charges the Purchaser a conveyancing fee* for registering the transfer of the property from the Seller’s name to the Purchaser’s name. These fees are calculated on a sliding scale and are subject to VAT.
  • If the purchaser makes use of mortgage bond finance, the attorneys that register the bond will charge a mortgage bond registration fee*.
  • The Deeds Office levies* a charge for property registrations as well as mortgage bond registrations and cancellations.
  • The transferring and bond registration attorneys will also charge a fee for Post and Petties*.

(All costs marked with an * can be viewed on the costs table as provided by Dykes van Heerden & Associates by clicking here.

  • The purchase price normally includes the estate agent’s commission (normally thus payable by the seller). This is the fee payable to the estate agent that has negotiated the sale. Law does not set the fee, but the general rate, which is used in the trade, is 7,5%. The amount is then paid out of the purchase price to the agent on registration of transfer. If the estate agent is registered for VAT, the commission will be subject to VAT.
  • In the event that the Purchaser takes occupation of the property before the date of transfer, a consideration
    for occupation
    can be agreed on.
  • The banks charge an administration and initiation fee to a maximum amount of R5 700 (incl VAT) when a mortgage bond is registered.
  • A rates clearance certificate fee is payable
  • The purchaser may have to reimburse the seller for rates and taxes that have been prepaid by the seller until date of transfer.
  • Local Authorities require deposits for the connection of water and electricity.
  • Connection of and deposit on a fixed line telephone would also need to be paid.
  • Provision has to be made for life insurance in the event that the buyer is making use of mortgage finance and short term insurance to secure the property and its contents. REDZ etc has partnered with SANTAM, SA’s largest short term insurance provider to address your needs, should you so require.
  • Relocation costs must also be considered.