Page 35 - Robin Twaddle PTG 2017 Digital

COSTS OF BUYING & SELLING PROPERTY

TYPICAL COSTS OF BUYING

PURCHASE PRICE
◆◆ A deposit (usually 10% of the gross purchase price) to the estate agent or conveyancer

payable usually on signature of the deed of sale by both parties or within 7 to 14 days
from signature (if applicable).
◆◆ The balance of the purchase price is lodged with the conveyancer prior to transfer, or is
secured by way of a bank guarantee. Over and above the purchase price, the purchaser
should have the cash available to cover the transfer costs (if this is not included in the
bond) and the bond registration costs as follows:

TRANSFER COSTS
◆◆ Transfer duty – calculated on a sliding scale between 0% to 13% of the gross purchase

price, is payable to SARS. (R0 to R900 000 is exempt).
◆◆ If the seller is a VAT vendor, then VAT is payable at 14% of the purchase price. As the

seller is liable for payment, it is important to add the VAT to the purchase price, and to
state clearly whether the agreed purchase price includes or excludes VAT. If nothing is
stated, it is deemed to be inclusive of VAT, and the seller will be liable for VAT at the
“tax fraction” (which equates to 12.28% of the gross price).
◆◆ The transaction may be zero-rated only when an income generating entity, which is also
a going concern, is sold from a VAT vendor to a VAT vendor.
◆◆ A divorced spouse may acquire sole owner­ship in the whole or any portion of property
registered in the name of his or her divorced spouse. Such transfer shall be exempt
from transfer duty where that property or portion is transferred to that divorced spouse
as a result of the dissolution of their marriage.
◆◆ Conveyancing fees – of the transferring attorney, may vary slightly according to rates
set by the conveyancer who attends to the transfer, but are based on recommended
fee guidelines from the law society (plus VAT).
◆◆ Bond registration costs – the purchaser normally pays the transfer and bond
registration costs (plus VAT).
◆◆ Deeds office /registration fees – a fee which varies between R35 and R5 845,
dependent on purchase price /value of property.
◆◆ FICA costs – usually between R500 and R1 000 (plus VAT) per FICA investigation.

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