The Rep

Bond and transfer costs add up, so be aware when purchasing a property


To avoid causing any unnecessar­y stress when purchasing a home, it can be useful to understand the various costs you will incur above and beyond the asking price.

As a rule of thumb, buyers should allow for between 8% and 10% of the purchase price to cover the additional costs, which will include bond registrati­on fees, transfer duty, transfer costs, and other legal fees.

“When purchasing a property, there is often confusion regarding the distinctio­n between transfer duty and transfer costs.

“Many buyers are also surprised by the bond registrati­on costs that they incur,” says Adrian Goslett, regional director and CEO of RE/MAX of Southern Africa.

RE/MAX gives clarity to what each of the costs are and how buyers can budget for them:

Transfer costs

Transfer fees are paid to a transferri­ng attorney, who is appointed by the seller to transfer ownership of the property to the buyer.

These costs are payable by the buyer and will vary, depending on the property purchase price.

It will also consist of the conveyance­r’s fees, such as postage and petties, plus VAT.

Usually, the attorneys will provide the buyer with a breakdown of their costs at the inception of a transactio­n in the form of a proforma account.

To get an idea, buyers can make use of BetterBond’s bond and transfer cost calculator.

Transfer duty

Transfer duty is a tax levied on the sale of a fixed property acquired by any person by way of a transactio­n or in any other way.

These costs are payable by the buyer to the SA Revenue Service (SARS) when the property is transferre­d from the existing to the new owner.

This will normally be done by a conveyance­r, who acts on your behalf.

Transfer costs vary depending on the purchase price and can be calculated on BetterBond’s bond and transfer cost calculator.

It is important to note that transfer duty is not always applicable.

For example, transfer duty is not charged on a property that costs less than R1m.

A newlywed spouse who is married in community of property will also automatica­lly become the co-owner of their spouse’s property without paying the transfer duty.

Similarly, if a property is awarded to a spouse in a divorce, transfer duty does not apply.

Beneficiar­ies are also exempt from paying transfer duty on property they inherited from a deceased estate.

For those relying on the sale of their previous home to cover this expense, it should be noted that transfer duty must be paid no later than six months from the date of conclusion of the deed of sale.

Usually, this is not worth worrying too much about as most homes take about three months to sell and another three months for the transfer to go through, all of which will fall within the stipulated six-month period.

❝ As a rule of thumb, buyers should allow for between 8% and 10% of the purchase price to cover the additional costs.


Bond Costs

To set up the bond on a property, buyers will also have to cover a few additional costs upfront.

These include a bond registrati­on cost, bond deeds office fees, post, petties FICA, and a bank initiation fee.

These costs can add up to a large amount, so it is advisable to use an online calculator to get an estimate of these costs before going ahead and purchasing a property.

“Real estate agents deal with these transactio­ns daily and have the hard-earned experience and knowledge to guide you through every step so that you are never left confused at any point during the process of finding the perfect home,” Goslett says.

For real estate advice or get in touch with a real estate profession­al from the world’s leading real estate brand, visit

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