Buying a home in South Africa – all the costs
When you buy a property, you have to pay a tax known as transfer duty. Transfer duty is paid on a sliding scale – the more expensive the property, the higher the duty, as follows:
If the purchase price is R500 000 or less, you pay no transfer duty.
If the purchase price is between R500 000 and R1 million, you pay transfer duty of five percent on the value above R500 000. For example, if you buy a property for R800 000, you pay transfer duty of five percent on R300 000 (R800 000 – R500 000).
If the purchase price is more than R1 million, you pay transfer duty of R25 000 plus eight percent on the value above R1 million.
You do not have to pay transfer duty if you buy property from a seller who is registered as a VAT vendor and the sale is part of his or her business activities – for example, when you buy property from a developer or at an auction. on the purchase price, as follows: R300 000 to R500 000: R400 R500 000 to R1 million: R500 R1 million to R2 million: R600 R2 million to R3 million: R800 R3 million to R5 million: R1 000 More than R5 million: R1 200 The recommended fees for conveyancers to register a bond are as follows, based on the bond amount: Below R500 000: up to R5 400 R500 000 to R1 million: R5 400 + R800 per R100 000 (or part thereof) over R500 000
R1 million to R5 million: R9 400 + R400 per R100 000 (or part thereof) over R1 million
More than R5 million: R25 400 + R200 per R100 000 or part thereof over R5 million. The Deeds Office is also responsible for the registration of your mortgage bond. Levies are based on a sliding scale depending on the value of the bond to be registered, as follows: R300 000 to R500 000: R400 R500 000 to R1 million: R500 R1 million to R2 million: R650 R2 million to R5 million: R1 000 More than R5 million: R2 000. name, the bank is not allowed to charge you an initiation fee if the bank you are switching to approached you first. In other words, if another bank approaches you with an offer of a more attractive interest rate and you agree to switch banks, you should not be charged an initiation fee. You will, however, be charged for the re-registration of the bond. This separate, ongoing fee is usually added to your instalment and should be reflected as a separate line item on your home loan statement. This fee is limited to R57 (including VAT) a month. You will also have to pay the conveyancer the municipal rates due on the property. The requirements differ from one municipality to the next and most municipalities ask for between four and six months rates to be paid upfront but this also depends on the time of year when you buy the property.
In addition to paying a pro-rata proportion of the municipal rates for the year, you will be charged for a rates clearance certificate, showing that the rates on the property are up to date. The certificate costs between R200 and R500.