In South Africa the Government levies a tax, known as transfer duty (or transfer fees) on all property transfers above a certain value. Home buyers must prepare themselves to pay these transfer costs in addition to the purchase price of the house. For expensive houses transfer fees alone can amount to hundreds of thousands. Other transfer costs, such as fees charged by attorneys, can also be significant.
This means that apart from allowing for the purchase price of the property, prospective home buyers must also work out upfront whether they have enough cash to pay the various transfer costs, including transfer fees.
Beware of the hidden costs of transfer
There is nothing worse than moving into your new home to discover that the roof leaks, or that there is extensive rising damp, or that your geyser hasn’t been installed properly. These costs can amount to many thousands of Rands and once you have signed the offer to purchase you have no come back to private sellers.
The wise thing to do is to get a Home Inspection done and be aware of the true condition of the property and have an estimate of the repair.
As a service to South African home buyers HouseCheck offers an informative free eBook which deals with all aspects of home buying in South Africa. This book includes chapters on: Transfer costs and the legal and financial process, finding a house and dealing with estate agents, the importance of home inspections, information on transfer fees and other transfer costs and the legal and financial process.
Sign up here to receive this informative free eBook.
What buyers should know about transfer costs
- Transfer fees must be paid by the buyer to the taxman (South African Revenue Services) before ownership of the property can be legally transferred from the seller to the buyer.
- Transfer fees are calculated on the price of the property and kick in above R600,000.
- Transfer duty can be significant.
- Other transfer costs include attorney’s fees for registering the transfer, more attorney’s fees for registering the bond and Deeds Office fees.