Property buying costly

Moneyweb

A reader asks: I’m purchasing property. I received a statement from the conveyancers which I settled (I paid them about 3% of my bond). On signing transfer documents, I was asked to sign documents saying I’m responsible for full payment of transfer duty of an additional R9 000. What is this?

Gavin Butchart, financial director of Brenthurst Wealth, answers:

Unfortunately there are numerous costs related to a property transaction, which the purchaser isn’t always fully aware of. Generally they are:

Attorney’s fees. The transferring attorney normally charges a fee, calculated according to a tariff set out by the Law Society of South Africa and based on the property purchase price. These fees can vary, but the tariff is generally accepted for the work done in the transfer.

Sars transfer duty charges. This is a tax on all immovable property transactions.

The seller would also be liable for bond cancellation costs, agent’s commission, outstanding electricity, water, rates, taxes and potential capital gains tax depending on the property’s value. No transfer duty is payable if the transaction is subject to VAT. Other costs include deeds office charges, municipal clearance charges, bond registration charges and bank initiation fees.