What does it cost to transfer ownership of a house to another person?

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07 December 2018

Beside the purchase price of a house, property transfer costs are often overlooked by property buyers and they are taking by surprise when presented with these additional costs.

These costs relate to tax, administration and registration fees; they are either charged by the government or the attorneys involved in the transfer.

Property Transfer Costs for the BUYER

Transfer duty

Transfer Duty is a government tax levied on the value of any property.

Currently property up to R900,000.00 are exempt from transfer duty.

Deeds Office fees

Deeds office fees are a government administrative fee charged by the deeds office to record the transfer of a property or the registration of a bond.

The fee is a tariff scale calculated based on either the purchase price of the property or the bond amount. There are different scales for transfers and bonds.

Attorney Transfer costs

A transfer attorney (also know as a “conveyancer”) is required to transfer a property. The seller normally appoints the transferring attorney.

The transfer is recorded with the deeds office.

Transfer Attorney costs are based on a tariff and the fee is calculated based on the purchase price of the property.

Attorneys Bond registration costs

A bond registration attorney is required to register any bond on a property.

Bonds must be registered with the Deeds Office and the financial credit provider will normally appoint the bond registration attorney they prefer.

Bond Attorney costs are based on the same tariff as the transfer attorney tariff and the fee is calculated based on the the bond amount.

 

Property Transfer Costs for the SELLER

Rates Clearance Certificate

A document issued by the municipal and/or utility provider that is required to sell a property.

In order to get the certificate a seller will need to pay the municipal and/or utility provider an amount based on their avenge usage.

To calculate the amount that needs to by paid, the average usage is multiplied usually by 3 (but can be as high as 12).

The transfer attorney will usually deal with the municipal and/or utility provider; and the seller will pay the funds to the conveyancer.

Electrical Compliance Certificate

A document from an electrician that confirms the property being sold complies with certain minimum electrical requires.

These minimum requirements are set by legislation and by-laws.

Capital Gains Tax

This is a Tax charged on the increased value of a property from the time is was bought to the time it is sold. However, there are exemption when the property is owned by a natural person.

For more information see another of our articles … click here.

Agents Commission

The amount an agent will charge a seller to facilitate the sale of their property.

This amount is usually based on a percentage of the purchase price … the percent is usually between 3.5% and 7.5% … but can more or less; it is negotiated between the seller and the agent.

If the the seller of the property is registered for VAT, VAT is payable on the purchase and not transfer duty. This can be higher than the transfer duty.

If you need a TRANSFER COSTS CALCULATOR you can find one at the website of GCM Legal … CLICK HERE.

Article Via: GCM Legal

 

DISCLAIMER: THIS INFORMATION DOES NOT CONSTITUTE LEGAL ADVICE.  IT IS ALWAYS ADVISABLE TO DISCUSS YOUR SITUATION WITH AN ATTORNEY OR PROFESSIONAL.

PROPERTY SALE AGREEMENT / OFFER TO PURCHASE


R299

 

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