The following information is provided for basic reference purposes only. It is no substitute for obtaining detailed quotes from vendors, estate agents, local authorities, attorneys and anyone else involved in your property transaction.

The information provided on this page focuses on the buyer’s cost in more detail.

What are the approximate costs for the buyer?

Transfer costs

• Transfer costs are made up of
  • duties
  • deeds office fees
  • attorneys’ fees
• The cost is driven by the property value and whether or not the property is being purchased subject to VAT (e.g. a unit in a new townhouse complex)
• If the property is being purchased directly from a developer, the purchase will often attract VAT instead of transfer duties – in such a case, you should consult the seller for specific details – including deals they may have arranged with an attorney to register the property in your name
• The same applies to commercial properties that are purchased from a VAT registered seller – the sale may attract VAT instead of transfer duties, and the VAT may be reclaimable – but you should discuss the details of the transaction with your attorney to confirm this
• In other cases, as of 1 March 2020, transfer duties are determined according to the following table (this applies to individuals, close corporations, companies and trusts):
  Value of property

  Rate

  R 0 – R 1 000 000

  0%

  R 1 000 001 – R 1 375 000

  3% of the value above R 1 000 000

  R 1 375 001 – R 1 925 000

  R 11 250 + 6% of the value above R 1 375 000

  R 1 925 001 – R 2 475 000

  R 44 250 + 8% of the value above R 1 925 000

  R 2 475 001 - R 11 000 000

  R 88 250 + 11% of the value above R 2 475 000

  R 11 000 001 and above

  R 1 026 000 + 13% of the value above R11 000 000
• The deeds office fee for transferring a property is also based on a sliding scale and to give you a rough idea, this will be in the region of R 90 for a property of R 150,000; R 1,142 for a property of R 1m; R 2,175 for a property of R 5m; R 3,002 for a property of R 10m, etc.
• The transferring attorney will charge conveyance fees to transfer the property into your name, and these are also based on the property value. Excluding VAT, these fees will be in the region of R 6,260 for a property of R 150,000; R 20,580 for a property of R 1m; R 53,780 for a property of R 5m; R 74,780 for a property of R 10m, etc.
• The transferring attorney will also usually charge for the recovery of petty expenses such as postage, and will charge a deeds office search fee – typically these costs add up to around R 2,000 excluding VAT on smaller bonds, but increase if the purchase price of the property increases.
• You will also have to pay VAT on the conveyance fees and the additional charges
• In total, assuming that transfer duties apply (i.e. not VAT), the total transfer costs could amount to approximately
  • R 7,289 for a property of R 150,000;
  • R 24,809 for a property of R 1m;
  • R 84,745 for a property of R 2m;
  • R 430,004 for a property of R 5m;
  • R 1,004,999 for a property of R 10m, etc.

Bond costs

• Bond costs are made up of
  • more deeds office fees
  • more attorneys’ fees
  • bank fees
• Bond costs are primarily driven by the size of the bond you register over the property (which in turn depends on the size of the mortgage loan that you need)
• Once again, the deeds office fee for registering the bond is based on a sliding scale and to give you a rough idea, this will be in the region of R 438 for a bond of R 150,000; R 1,142 for a bond of R 1m; R 2,157 for a bond of R 5m; R 3,002 for a bond of R 10m, etc.
• The attorney who registers the bond will charge conveyance fees for the bond registration which are based on the size of the bond. Excluding VAT, these fees will be in the region of R 6,260 for a bond of R 150,000; R 20,580 for a bond of R 1m; R 53,780 for a bond of R 5m; R 74,780 for a bond of R 10m, etc.
• The attorney who registers the bond will also usually charge for the recovery of petty expenses such as postage, and will charge a deeds office search fee – typically these costs add up to around R 2,000 excluding VAT for a smaller bond, but increase when the bond amount to be registered increases
• You will also have to pay VAT on the attorney’s fees and the additional charges
• The bank will charge you a once-off bond initiation fee of R 5,250 plus VAT if the National Credit Act (NCA) applies to the loan
• For commercial or residential loans which do not fall under the NCA, a raising fee will usually apply
• In total, the bond costs could amount to approximately
  • R 7,637 for a bond of R 150,000;
  • R 24,809 for a bond of R 1m;
  • R 34,495 for a bond of R 2m
  • R 64,004 for a bond of R 5m;
  • R 88,999 for a bond of R 10m, etc.

Adding it all up, assuming an 80% mortgage on the purchase of a normal residential property that is not subject to VAT or a commercial raising fee, but including a standard NCA aligned initiation fee, your total transaction costs could amount to approximately

• R 25,564 for a property of R 150,000 with a bond of R 120,000;
• R 57,440 for a property of R 1m with a bond of R 800,000;
• R 127,640 for a property of R 2m with a bond of R 1.6m;
• R 497,700 for a property of R 5m with a bond of R 4m;
• R 1,099,150 for a property of R 10m, with a bond of R 8m, etc.

What else should I consider?

• As a purchaser, you will usually be required to pay your municipal rates and taxes for up to a year in advance before a clearance certificate is issued. In addition, if the seller is in arrears with rates or other municipal accounts, you may need to pay these on their behalf and have the amount deducted from the final settlement – this can mean having to come up with extra cash in the short term to ensure that the transaction can go-ahead
• The above costs are all in addition to what you will need to pay as a deposit – they are generally not costs that can be added to your bond except if specifically agreed with the bank as part of your finance application and assessment