Let’s consider the buyer costs when you buy your dream home. We cover to a large extent, what transfer duty is, which applies to properties bought for over R1m. Private Property recently outlined in detail a little more about transfer duty. Here, we also cover all the costs to consider when buying or selling a property.
What is Transfer Duty?
SARS defines transfer duty as a tax that is levied on the sale of a fixed property. This tax is payable to SA Revenue Service (SARS) when the property is transferred from the existing owner to the new owner.
When you buy a property and you become a new owner, you will be liable for the transfer duty in addition to the sales price you agree. This and other costs like conveyancing fees. More about the transfer process.
Transfer duty is based on value, not price!
Transfer duty is based on the value of a property, not the price. SARS regards the purchase price to be the same as the value of the property. But in some instances, SARS considers the purchase price to be different from the true value of a property. This may happen when a property is sold to someone you know, (friend or family) and the value is understated. Transfer duty will always need to be paid on the true value of a property.
In early 2021 the budget speech included an important amendment to the transfer duty calculation. This is relevant to all property transactions. And this increases the threshold under which transfer duty is not payable. This threshold increased to R1 million, up from R900,000. This means that if you buy a property that costs R1 million or less, you will not have to pay transfer duty. You will however be liable to other transfer and conveyancing fees.
Transfer duty table payable:
- R0 to R1,000,000: 0%.
- R1,000,001 to R1,375,000: 3% above R1,000,000.
- R1,375,001 to R1,925,000: 6% of the value above R1,375,000 (R11,250).
- R1,925,001 to R2,475,000: 8% above the value of R1,925,000 (R44,250).
- R2,475,001 to R11,000,000: 13% above the value of R11,000,000 (1,026,000).
15% VAT or transfer duty?
Also, it’s important to remember that a property transaction cannot be subject to both VAT and transfer duty. If you are buying a new home from a developer who is a VAT vendor then you will be liable for VAT. Remember to ask your developer if they are a VAT vendor. Also, remember to check your OTP for any hidden costs.
What properties are exempt from transfer duty?
Private Property covers this in more detail but the following considerations are exempt from paying transfer duty.
- Canceled transactions.
- Marriage in community of property.
Costs when buying a property
- Transfer costs or transfer duty.
- Conveyancer fees.
- FICA costs.
- Bond costs include a deposit to secure a better interest rate with the bank.
Selling a property? What costs can you expect?
- Bond cancellation fees: levied by the bank (penalties for cancellation of the bond).
- Bond settlement amount: – the amount that is outstanding on the bond with the bank.
- Compliance certificates: could include (Gas Compliance, Electrical Compliance, and Electric Fence compliance. Remember that each certificate (x 3) will cost around R1,500 and will exclude any additional work that may be required to get your property up to the required, legal standard.
- Commission: and VAT at 15% is payable above the commission rate you agree with an agent.
- FICA: budget on around R900.00 + VAT.
- Legal fees: +/-R 4,500.00 per bond registered – The bank will instruct the relevant attorneys to do this.
- Levies: If you are selling a property in a sectional title complex, remember you are responsible for all the levies until the transfer of ownership takes place. Remember if you are in arrears, we can arrange with the conveyancing attorneys to settle the arrears portion with the proceeds of the sale.
- Rates and Taxes: As the seller of a property you are responsible/liable for all rates and taxes on the property until ownership is transferred. A Rates Clearance Certificate will be required at a cost of +/- R 1,500.00.
Keller Williams SA is the biggest and we are the best!
Simply, Keller Williams is the franchised largest real estate brand in the world. So if you need to know what the buyer costs are when you buy your dream home, let us take you through them one step at a time. A Keller Williams agent will be well-placed to confirm all the costs you need to consider. And, Keller Williams is the fastest-growing franchised estate agency in SA. With almost 1,500 estate agents working under the various market centres (Keller Williams Select, Keller Williams Eden, Keller Williams Clockwork, etc) all our market centres, leadership and agents join forces to sell your property. If you are thinking about selling your property we can most certainly help. The good news is that we have almost 1,500 agents who will help you sell your property. And that’s with 1 board on your pavement. Keller Williams is all about creating a win-win solution for all our stakeholders across the value chain or the deal is off. Keller Williams is also able to boast internationally about leading the curve in terms of training, be that local or international. Click here to book your valuation.
Looking for your dream home?
Why not browse our current listings for Keller Williams. With almost 1,500 agents countrywide all our agents have stock. And the reason why Keller Williams is such a powerful brand is it is in our culture to share listings as agents. And what drives us is the ability to leverage, be that buyers or sellers. Click here to browse our properties online.
Are you pre-approved?
We recently covered the benefits and the importance of being pre-approved for finance when you go shopping for your dream home. Click here to view why this is so important. Get the best rate, submit your docs once to all the major banks and go shopping with confidence.
Get in touch
So, if you need a valuation done on a property in Randburg or elsewhere in SA, I can help. Give me, Sandy Graham a call or send me a WA to (083) 550-1220. Alternatively, drop me an e-mail at firstname.lastname@example.org. I have a vast network of almost 1,500 top Keller Williams agents at my fingertips who are all just dying for the opportunity to partner with you to sell and conclude your property transaction in record time.
If you want to view all the Keller Williams properties across the country click on my website to start the search for your dream home.
Estate Agents – want to know more about KW?
Keller Williams (USA) is a top real estate brand to work for. If you are an estate agent and want to know a little more drop me an e-mail. If you would like to leverage world-class technology to the benefit of all our stakeholders across the value chain and end up with a win-win every time, then let’s touch base. Also, read what makes Keller Williams the best!
Need to read up on more articles that you may find valuable, be sure to read through some of our content and advice:
- Randburg property trends (Oct 2021).
- Property prices in Bromhof
- Property prices in Sundowner
- Tips when selling property in a buyer’s market.
- What goes into preparing an accurate property valuation?
- What’s my property worth?
- Do you need a free property valuation?
- Sell your home fast but declutter 1st
- Get a pre-approval to ensure a successful property transaction
- The importance of setting the right asking price when you sell your home
- The Mandate and its Merit
- Moving home to get your little ones into the best schools in Randburg
- Buyer costs
- Sell my house and let’s consider the process and the costs when you sell
- Keller Williams a true disruptor to the real estate market in SA
- Downsizing and need something smaller?
- Properties for sale