If you’re in or getting into the market to purchase property then make sure you understand the costs to buying property. That’s right, there isn’t just the purchase price to pay there is also myriad of costs you’ll incur along the way. Here are 3 important ones to remember.
Transfer Costs and Duty
Transfer duty is a Government Tax. This is generally the main costs to purchasing property… Damn taxes!
If the seller is registered as a VAT vendor (i.e Property Developer) there is no Transfer Duty payable, however the seller must insure they have included VAT in the selling price.
Transfer duty is calculated as follows (Purchase price on Left, Transfer Duty on Right):
1 – 1000 000 0%
1 000 001 – 1 375 000 3% of the value above R1 000 000
1 375 001 – 1 925 000 R11 250 + 6% of the value above R 1 375 000
1 925 001 – 2 475 000 R44 250 + 8% of the value above R 1 925 000
2 475 001 – 11 000 000 R88 250 +11% of the value above R2 475 000
11 000 001 and above
R1 026 000 + 13% of the value exceeding R11 000 000
Bond Registration costs
If you’re planning on purchasing property via bank financing, it’s important for you to remember it costs money to just get a bond. Bond Fees, otherwise know as Registering Conveyancers Fees are for the service Registering Attorneys provide to get your bond registered over the title deeds. This amount varies with the value of the bond.
For example:
Bond of R2 000 000 will have a fees approx R35 000.
Bond of R1 000 000 will have fees approx. R25 000.
Moving Costs
Often forgotten until the end of the process. This can cost you lots or little it all depends on how far you’re moving and how much you’re moving. Try to get quotes from multiple moving companies as soon as possible so you can budget accordingly.
There are plenty of other small costs that can add up, if your just starting out on your property journey, speak to you trusted agent to make sure you are budgeting correctly for the purchase.