Most clients are always surprised when handed a pro forma statement of account when they either sell or purchase a property. Hereunder are the costs associated with the sale and/or purchase of a property so that you are not caught off-guard.
Freehold property (no bond with a financial institute)
- The seller will be liable for the estate agent’s commission if an estate agent was utilised for the sale of your property.
- If agreed to in the sale agreement, the Seller will be liable for the costs of compliance certificates. The most common compliance certificates being the Electrical Compliance Certificate, the Entomologist (Pest) certificate, Gas certificate (if applicable), Electrical Fence Certificate (If applicable) and Alien Species Certificate (If applicable).
- The seller will be liable to pay all outstanding as well as future rates, water, electricity and utility charges as requested by the Municipality in order to issue a rates clearance certificate, which is required to be lodged at the Deeds Office to register the transfer. This amount will be pro-rated on transfer and any overpayment will be refunded to the Seller.
- If the property is a sectional unit, then the seller will be liable to pay for all levies outstanding and an advance amount as called for by the body corporate in order to issue the levy clearance certificate, which is required to be lodged at the Deeds Office to register the transfer. This amount will be pro-rated on transfer and any overpayment will be refunded to the Seller.
Property with a bond (financial assistance from a financial institute)
- Amount due to the Bank to settle the outstanding amount due on the bond plus interest from the date of the cancellation request to the date of registration of transfer. This payment will be covered by the issuing of a guarantee to the Bank. This guarantee will be issued from the purchase price of the property being sold. This will be attended to by your transfer attorney.
- Cancellation costs will be payable to the attorney appointed by the Bank to attend to the cancellation of the bond.
- Estate agent’s commission, as discussed above.
- rates, water, electricity and utility charges as requested by the Municipality, as discussed above.
- If the property is a sectional unit, levies as discussed above.
Purchasing the property without financial assistance from a financial institution
- Purchase price which will be payable as per the terms and conditions of the sale agreement or offer to purchase that you, as the Purchaser, signs.
- Transfer costs which are payable to the transfer attorneys for preparing of documents (tariff based fee which is calculated on the purchase price of the property), deeds office fees (tariff based fee payable to the Deeds Office), Clearance Certificate fees for rates and levies (levies if the property is a sectional property), postage and petties, disbursements amongst other charges. Postage and petties, as well as the disbursements and other charges, vary amongst the different law firms. Pro rata rates and levy (if applicable) costs will be included in this account.
- If the purchase price of your property is greater than R900 000.00 then transfer duty will be included on the account. This amount is collected from you as the Purchaser and paid to the South African Revenue Services on your behalf. The amount of transfer duty payable will be calculated on the following tariff:
Value of property (R)
|0 – 900 000
|No transfer duty
|900 001 – 1 250 000
|3% of the value above R900 000
|1 250 001 – 1 750 000
|R10 500 + 6% of the value above R1 250 000
|1 750 001 – 2 250 000
|R40 500 + 8% of the value above R1 750 000
|2 250 001 – 10 000 000
|R80 500 + 11% of the value above R2 250 000
|10 000 001 and above
|R933 000 + 13% of the value above R10 000 000
Purchasing the property with financial assistance from a financial institution (Bond)
- When a Purchaser applies to a financial institute for financial assistance (bond), the Bank will appoint an attorney to attend to the bond registration.
- A bond registration attracts bond costs which includes, amongst other things, the banks initiation fee (this may be payable upfront by the Purchaser or included in the bond-this amount differs for each financial institution), bond registration fees for the bond attorney which is made up of attorney’s fees as per the Law Society suggested tariff.This tariff is based on the amount of the bond being registered, deeds office fees, and other disbursements.
Contributor: RAKSHA MAHABEER (Senior Associate) (Conveyancing) (PMB Office)
E-mail: email@example.com | Tel: 033 341 9100
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Author: TMJ Attorneys