Transfer of Immovable property: What costs are the Seller and Purchaser responsible for?

Transfer of Immovable property: What costs are the Seller and Purchaser responsible for?

Transfer of Immovable property: What costs are the Seller and Purchaser responsible for?

Author: Ewan O’Reilly

The Seller is responsible for the payments of the following:

Estate agents’ commission:

This is the amount or percentage that the agent and the seller agree to. VAT may also be charged on the commission amount, should the Estate Agency be registered as a VAT Vendor.

Bond cancellation attorney’s fees:

Where a bond is registered over the property, the Bank will appoint an Attorney firm to attend to the cancellation of the bond and the Attorneys cost will be the responsibility of the Seller.

Municipal rates and services:

A 60 day advance payment in terms of rates and taxes is required by the Municipality prior to the issuing of a rates clearance certificate (RCC) which is required to be lodged in the Deeds Office.  Should the municipal account of the seller be in arrears, the arrears amount together with a 60 day / 2 month advance payment on rates and services will be required by the municipality.

Although the 60 day advanced payment is generally required by most municipalities, some of the municipal offices might have different requirements in terms of the advance payment.

Levies and/or other amounts owing to a Home Owners Associations or Body Corporates:

The seller will be responsible for paying all levies and other amounts and charges owing to any relevant authority or body corporate up to the date of registration of the transfer, as advised by such relevant authority, body corporate or managing agent. 

Certificates of Compliance:

Also known as COC’s remain the responsibility of the Seller. Any repair work which is necessary to obtain the COC’s as well as the inspection fees shall be for the account of the Seller. The following types of certificates of compliance may be applicable:

Electrical Certificate, Plumbing Certificate, Gas Certificate, Electric Fence Certificate, Beetle / Kewer Certificate.

Title Deed:

If the seller is selling an immovable property which is not bonded (there is no bond registered over the property) and has misplaced the Title Deed, the seller will need to inform the Conveyancer so that application can be made for a replacement Title Deed from the Deeds office. The seller will be responsible for the costs in this regard.

The Purchaser is responsible for the payment of the following:

Transfer fees:

Transfer fees relate to the work the Conveyancing Attorneys attend to, to ensure that the transfer successfully registers in the Deeds Office, which include fees, disbursements and VAT. Transfer fees are the responsibility of the purchaser unless agreed to otherwise with the seller in the offer to purchase.

The fees that the Conveyancer may charge are based on the Legal Practice Council guidelines and therefore the fees will be in line with these guidelines.

There are many websites that offer a fee/cost calculator that will calculate the transfer fees/cost for the transfer of immovable property, however, these websites give a rough estimate and it is advisable to obtain a quote from the Conveyancing Firm that will be attending to your transfer.

Transfer duty:

The Transfer Duty Act stipulates that transfer duty in respect of property being bought is a form of tax to be paid to South African Revenue Service by the purchaser of the property. Transfer duty becomes applicable to the purchase of immovable property when the value of the property exceeds R1 000 000 (latest threshold). It is important to note that transfer duty is calculated on the value of the property, not on the price of the property, although the norm is for SARS to accept the purchase price as the value of the property, SARS may deviate.

Bond registration costs:

Should the purchaser finance the purchase of immovable property through a loan from the bank, the relevant bank will appoint a firm to attend to the successful registration of the bond in the Deeds Office which is registered over the property being purchased. The bond registration fees include the attorney’s fees, disbursements and VAT. The fees that the Conveyancer may charge are based on the Legal Practice Council guidelines and therefore the fees will be in line with these guidelines.

Rates Clearance certificate:

The purchaser will be responsible for paying for the Rates Clearance Certificate fee which is issued to the Conveyancer by the Municipality.

However, before the municipality will issue the Rates Clearance Certificate, the seller needs to pay all outstanding amounts, if any and also 2 months / 60 day’s advanced payment that the municipality generally requires (some of the municipal offices might have other requirements with regards to payment in advance)

Levy Clearance certificate

The seller is responsible for paying levies up to the date of registration and the purchaser is responsible for paying levies from the date of registration and also for the Levy Clearance Certificate.

The Levy Clearance Certificate will be relevant to all Sectional Title transfers and where a Home Owners Association consent is required. The consent is generally referred to as a consent to transfer and is only applicable where the property falls under or is overseen by the Home Owners Association.

*The costs above are general costs incurred in transferring property between the seller and the purchaser and is not an exhaustive list of all costs that will be incurred.

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