What Is The Costs Involved When You Buy A Property?
Buying a home is the biggest financial commitment that most people will make in their lifetime. It would be so simple if the price tag on your new home was all you had to pay!
In reality, there are several hidden and not-so-hidden costs associated with buying property. It is worth planning for these in advance of transfer so that you can be sure you have the funds in place.
The following expenses should be planned for.
Bond registration and transfer costs
These are probably the biggest costs associated with buying a property. They are also unavoidable.
1. Transfer Costs:
The costs incurred by the seller are:
• Estate Agent's Commission;
• Conveyancer's Fees for cancellation of bond over the property;
• Electrical, plumbing and infestation clearance certificates;
• Rates and Taxes/Levy
The costs incurred by the purchaser are:
Firstly, optional cost:
Description: A Deposit is the initial payment you make to secure the purchase of your property. Your deposit is not there to pay the extra costs involved in purchasing property, i.e. Bond Fees, Transfer Duty, Attorneys Costs, and so on, it is a cost on its own.
Estimated Amount: The amount of your Deposit depends partially, on how much money you have available (savings) to put down.
Remember: The bigger the Deposit, the smaller the home loan repayment.
When to pay: Once off, upfront.
Who to pay: The Transferring Attorneys.
Who the money is for: The Transferring Attorneys hold the Deposit in an interest-bearing trust account, until date of transfer.
The interest accrued on this amount while being in the trust account, is paid back to you.
Secondly, ordinary costs:
• Transfer Duty
Description: Transfer Duty is a Government Tax levied to transfer the property from the seller's name into the buyer's name.
There is no Transfer Duty on property under R900 000
When to pay: Once off, before transfer of the property.
Who to pay: The Transferring Attorneys.
Who the money is for: South African Revenue Services.
• Conveyancers Fee - Property Transfer
Estimated Amount: The amount varies according to the purchase price of the property. The fee is based on tariffs recommended by the Law Society, but may differ slightly from one law firm to another.
When to pay: Once off, before transfer of the property.
Who to pay: The Transferring Attorneys.
Who the money is for: The Transferring Attorneys.
• Deeds Office Registry Fee
Description: This fee is charged by the Deeds Office for the Title Deed and legal transfer and registration of your new home into your name.
Estimated Amount: The amount is fixed according to the amount of your home loan.
When to pay: Once off, before transfer of the property.
Who to pay: The Transferring Attorneys.
Who the money is for: The Deeds Office.
• Sundries / Postage & Petties
Description: The Transferring Attorneys charge a levy to cover small things like posting documents to other conveyancers, the bank, the estate agent, the Deeds Office, etc..
2. Bond registration costs:
• Conveyancer's Fee - Bond Registration
Estimated Amount: The amount varies according to your home loan amount. The fee is based on tariffs recommended by the Law Society, but may differ slightly from one law firm to another.
When to pay: Once off, before registration of your bond.
Who to pay: The Registering (Bond) Attorneys.
Who the money is for: The Registering (Bond) Attorneys.
• Sundries / Postage & Petties - Bond Registration
Description: The Registering (Bond) Attorneys charge a levy to cover disbursements made for posting documents to other conveyancers, the bank, the Deeds Office, system and office admin fees etc.)
When to pay: Once off, before registration of your bond.
Who to pay: The Registering (Bond) Attorneys.
Who the money is for: The Registering (Bond) Attorneys.
• Deeds Office Registry Fee - Bond Registration
Description: This fee is charged by the Deeds Office for the legal registration of your mortgage bond.
Estimated Amount: The amount is fixed according to the amount of your home loan
When to pay: Once off, before registration of your bond.
Who to pay: The Registering (Bond) Attorneys.
Who the money is for: The Deeds Office
For more information and to give you a rough estimate of the costs involved, please visit a whole range of calculators on the CCH website :
https://www.cch.co.za/calculators/#bond-transfer-costs
13 Apr 2018
Author Velile Tinto Inc - Lisbe Venter
Author Velile Tinto Inc - Lisbe Venter