5 Costs paid by the Purchaser in a property transaction
Category Property Investment
What does the Purchaser pay for?
This is a question we often hear from first time buyer and below we have a snapshot of the biggest costs to consider over and above the purchase price of your property.
Transfer Duty
Transfer Duty is a tax levied by the government and is one of the bigger costs you need to budget for when buying a property.
It is payable at least a month prior to the conveyancers and no registration/transfer can be passed to new owners unless this is paid.
No Transfer Duty is payable if the Seller is VAT registered however the Purchaser is then liable for VAT so it is important to take note of the wording in the Offer to Purchase.
Transfer Costs
The conveyancer or transferring attorney charges a professional fee for transferring the property from the Seller into the name of the Purchaser in the Deeds Office and legally fulfilling all requirements from beginning to end.
This is a once off fee which will be sent to you by the transferring attorney and is not to be confused with Transfer Duty, explained above.
Levy Clearance Certificate
The Purchaser is liable for payment of the Levy Clearance Certificate which is in effect a safety measure to ensure that any liability is covered with registration dates and if there is any overpayment it is refunded accordingly
Bond Costs (not applicable if cash purchase)
If you are purchasing property subject to a bond then there will be a specialist attorney that registers a bond conferring certain rights to the financial institution granting the bond and this fee is payable by the Purchaser.
Importantly an initiation fee is also charged once off by the bank when taking out a bond and is usually a maximum of R5000
Occupational Rent
This amount would have been agreed in the Offer to Purchase and is only applicable if you are looking to move into the property before Transfer takes place.
Author: Cesar Alexandre
