By Olga Makhuvha

Are you buying your dream house? If yes, this what you need know about the costs. It’s not only about the price tag of the property that you have to pay. Here is what you need to know about the cost.

Once you find your dream home, and put in an offer that’s accepted, you’ll need a conveyancing attorney to transfer ownership to you. The conveyancing service includes preparation and gathering of all documents required to finalise registration of the sale once it is lodged with the Deeds Office.

It’s a complicated legal process that is worth every cent of the fee to make sure transfer happens and the new ownership is registered as is required by government. The fees you pay the conveyancing attorneys are separate from transfer duty paid to SARS. Transfer duties are statutory and cannot be negotiated. A purchaser must pay the transfer cost to the conveyancing attorneys. The transfer cost and the transfer duty must be differentiated.

Bond registration fee.

Most people prefer to take a home loan to finance their property that they’re purchasing. To register the mortgage loan, there are fees that must be paid to the bond registration attorney. The bond registration fees and costs relating to the administration of the bond and registration in the deeds office is payable to the attorney who attends to the bond registration process. The fees are calculated on the amount of the bond registered in the deeds office.

A Home Loan Initiation Fee charged by the bank is payable directly to the bank, and is generally included in the bond amount.

Administration Fee

The Administration Fee is payable to the bank to administer the home loan account. You can expect to pay around R 69.00 Monthly Service Fees.

Homeowner’s Insurance

Home owners insurance is required to cover the property and the permanent structures on it, against natural disasters like fire or storm damage. The amount will vary depending on the value of your property.

Transfer duty

What is it?

Transfer Duty is a tax levied on the value of any property acquired by any person by way of a transaction or in any other way. For the purpose of Transfer Duty, property means land and fixtures and includes real rights in land, rights to minerals, a share or interest in a “residential property company” or a share in a share-block company.

These are the Transfer Duty rates applied to properties acquired on or after 1 March 2020, and apply to all persons (including Companies, Close Corporations and Trusts):

Value of the property (R) Rate

1 – 1000 000 0%

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 R 1 375 000

1 925 001 – 2 475 000 R44 250 + 8% of the value above R 1 925 000

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 is over one million which means the purchaser needs to pay for transfer duty. But if the property is below the one million they won’t be any transfer duty payable. The table above show on how rates may be payable.

This article is a general information sheet and should not be used or relied on as legal or other professional advice. No liability can be accepted for any errors or omissions nor for any loss or damage arising from reliance upon any information herein. Always contact your legal adviser for specific and detailed advice.

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