Buying a new property isn’t as simple as getting approval for and paying off a bond. There are multiple additional taxes, fees and charges which will be payable to ultimately have the property registered in the name of the buyer. Some of the fees can be included in the bond application but others, such as Transfer Duty, which is payable to SARS, will need to be paid “out of pocket”. It is important to understand what each of these fees and charges are, and to whom they are payable.
In this article, we will discuss the different costs involved, as well as where to find and how to use a Bond and Transfer Cost Calculator.
Cost Calculator for Attorney Transfer Fees
Once the offer to purchase has been signed, it will be necessary to appoint an attorney, also called a conveyancing attorney, to oversee the transaction and to have the transfer of the property registered at the Deeds Office. The conveyancing attorney will be entitled to charge a fee for its services. Even though it is usually the seller who nominates the conveyancing attorney, it is the buyer who will be liable to pay the conveyancing attorney’s account. The conveyancing attorney’s fee for attending to the registration of the transfer of the property can be easily calculated prior to the purchase of a property by making use of the Bond And Transfer Costs Calculator on the Adams and Adams website. Simply insert the purchase price of the property to automatically calculate the estimated fees, charges as well as Transfer Duty which would be payable by the buyer.
The term Transfer Duty, refers to a tax that is to be paid to SARS (South African Revenue Service) prior to the property being transferred into the name of the buyer. Transfer Duty is payable according to a sliding scale, based on the value of the property. Where the purchase price of the property is R1 million or less, the transaction will be exempt, and no Transfer Duty will be payable. Simply insert the purchase price in the Transfer Cost Calculator on the Adams and Adams website and our calculator will automatically calculate the amount due to SARS. Transfer Duty is payable by the buyer to the conveyancing attorney who is attending to the transfer of the property. The conveyancing attorney will then pay the amount over to SARS to receive a Transfer Duty receipt which is to be lodged with the transfer documents at the Deeds Office as proof that the taxes have been paid.
Cost Calculator for Attorney Bond Registration Fees
Once the buyer’s bond has been approved, the bank will appoint a conveyancing attorney on its panel to attend to the registration of the bond, over the property, at the Deeds Office. The registration of the mortgage bond will take place at the same time as the registration of the transfer of the property. Like the fees which are payable by the buyer to the conveyancing attorney for the transfer of the property, the buyer will also be liable to pay the conveyancing attorney’s fees for attending to registration of the bond over the property. In most instances, a different conveyancing attorney will attend to registration of the bond, but it is also possible for the same conveyancing attorney to attend to the transfer of the property from the seller to the buyer as well as to the registration of the buyer’s bond. You can use the Bond Cost Calculator on the Adams & Adams website to calculate the bond registration fees.
Deeds Office Fees
Every property transaction must be registered at the Deeds Office. The Deeds Office is entitled to charge a fee for the registration of the transfer, calculated on the value of the property, as well as a fee for the registration of the bond, based on the value of the bond. Our Transfer Cost Calculator and Bond Cost Calculator will automatically calculate and include the prescribed Deeds Office fees which will be payable in either case. The buyer will pay this fee to the relevant conveyancing attorney as part of the conveyancing attorney’s statement of account, who will in turn pay the fees over to the Deeds Office.
Read this article to learn more about other costs to keep in mind when purchasing a property.
Our website also includes a Bond Repayment Calculator which can assist to calculate the approximate monthly bond repayment amount which will be payable by the buyer to the bank. The monthly bond repayment amount is influenced by, amongst other, the interest rate at which the loan was granted, the repayment period as well as the bank’s monthly service fees. A higher monthly amount will be repayable if the bank’s initial admin fees or any of the conveyancing attorney fees have been included in the loan amount, as these fees and charges are usually added to the total outstanding amount which will be repayable over the term of the loan.
Contact us to find out more about property law and how we at Adams and Adams can assist you with your next property investment.