When you purchase a property, you are advised that the costs of buying the property are for your account. However, at times you have seen property listings boasting that the property purchase is “duty free” or even “costs included”. It is no wonder that Purchasers are often confused when it comes to what they need to pay when buying a property.
The terms “Transfer Duty” and “Transfer Costs” are often used interchangeably, and one can easily think that they are the same thing. However, this is not the case. In fact, Transfer Duty is only one of the costs of transfer, in an ordinary second-hand residential property sale.
Transfer Duty must be paid to the South African Revenue Service (SARS) by the Conveyancer during the property transaction. The amount due is based on the value of the property and calculated according to a schedule released by SARS annually. The 2023 schedule, as applicable from 1 March 2023 to 29 February 2024 is shown below.
NOTE: Transfer Duty is not paid in several instances. For example, when the value of the property is under the threshold of R1 100 000.00, when the transaction is Vatable, or when the cause of action is a Divorce Order or an Estate Transfer.
Transfer Costs on the other hand, is a term used to provide for all the costs relating to the property required for transfer. The Transfer Costs are also largely dependent on the value of the property. Please see below an example of a Pro Forma Transfer Cost Account, which is presented to a Purchaser when signing their transfer documents.
NOTE: The Deeds Office fees and attorney transfer fees are also issued annually by the government and the Legal Practice Council respectively.
Should you be interested in seeing the estimated transfer costs based on a property value please follow the link as follows: www.fha.law.za/costcalculator. Kindly contact us should you have any further queries with regards to Transfer Costs for the Purchaser’s account, in a property sale.
- On June 29, 2023
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