by Datesh 
Buying a home is an exciting time, but it’s important to understand the costs involved before making a purchase. In addition to the purchase price, there are several fees and taxes that buyers must pay when buying a home in South Africa. In this blog, we’ll discuss the various fees and taxes associated with buying a home, including transfer costs.
What Are Transfer Costs?
Transfer costs are the fees paid to transfer the ownership of a property from the seller to the buyer. These costs are usually paid by the buyer and can be a significant expense. Transfer costs are calculated based on the purchase price of the property and include several fees and taxes, such as transfer duty, conveyancing fees, and deeds office fees.
Transfer Duty
Transfer duty is a tax that is paid to the government when a property is sold. The amount of transfer duty is based on the purchase price of the property and is calculated using a sliding scale. For properties priced below R1 million, there is no transfer duty. For properties priced between R1 million and R1.5 million, the transfer duty is 3% of the purchase price. For properties priced between R1.5 million and R2.25 million, the transfer duty is R30,000 plus 6% of the amount over R1.5 million, and so on.
Conveyancing Fees
Conveyancing fees are the fees charged by the conveyancer (a qualified attorney or specialist conveyancer) who handles the transfer of ownership of the property. These fees include the conveyancer’s professional fees, VAT, and disbursements, such as postage and search fees. The conveyancer’s fees are based on the purchase price of the property and are regulated by the Law Society of South Africa.
Deeds Office Fees
Deeds office fees are the fees charged by the Deeds Office for the registration of the property transfer. These fees are also based on the purchase price of the property and are calculated according to a sliding scale.
Other Fees
In addition to transfer costs, there are other fees and expenses that buyers should be aware of when buying a home in South Africa. These include:
Bond registration fees: If you are taking out a home loan to purchase the property, you will need to pay bond registration fees to register the bond with the Deeds Office.
Deposit: Most banks require a deposit of at least 10% of the purchase price when granting a home loan.
Homeowner’s insurance: You will need to take out homeowner’s insurance to protect your investment against damage and loss.
Moving costs: You will need to factor in the cost of moving your belongings to your new home.
In conclusion, when buying a home in South Africa, it’s important to understand the various fees and taxes involved, including transfer costs, conveyancing fees, and deeds office fees. These costs can add up quickly and should be factored into your budget when considering a purchase. By understanding the costs involved, you can make informed decisions and ensure that you are financially prepared for homeownership.
