From transfer duty to bond registration, we break down what you need to know to budget effectively before you buy. Picture: File
First-time buyers that are in process of buying a property may be under the impression that they only have to worry about the cost of the property, however, there are many other costs that they will need to budget for.
Carol Reynolds, Pam Golding Properties area principal for Durban Coastal, said there were a number of costs associated with buying property.
“The costs include transfer fees payable to the conveyancer; transfer duty payable to Sars; bond registration costs; as well as a portion of the rates payable in advance to procure the rates clearance certificate,” Reynolds said.
“The best way to calculate costs is to download a cost calculator which will calculate the costs for you.“
Here is a look at the costs involved with buying property.
According to Samuel Seeff, chairman of the Seeff Property Group, this is essentially a tax paid to government based on the purchase price of the property.
“The first R1.1 million of the purchase price is, however, exempt from transfer duty which is good news for first-time buyers. You can find the scale on the Sars website,” Seeff said.
Seeff said that if you take a mortgage loan to finance your property purchase, a bond will need to be registered over it at the same time that the property is transferred into your name which you will need to pay for.
Buyers will need to pay the attorneys that are involved with transfer and bond registration of the property, according to Seeff.
This is also based on a fixed scale of fees.
“While most banks offer 100% loans for first-time buyers (some still offer costs on top of that), there may be a requirement to pay a deposit, currently around 10% of the purchase price,” Seeff said.
This will also need to be lodged upfront with the transferring attorneys.
According to Mary Lindemann, Operations Executive, BetterBond, the municipality issues a rate clearance certificate for the property to confirm that the seller does not have any outstanding rates due on the property.
This must be issued before the transfer of the property can take place but a sum of the rates must be paid in advance to procure the certificate.
Seeff said that buyers should also budget for moving and other costs to set-up their new home such as installations for satellite TV or internet.
IOL Property