TOP 6 COSTS THAT A PURCHASER MAY BE LIABLE FOR WHEN BUYING A HOME
Purchasers often only budget for the purchase price of the property when buying a new home and don’t consider additional costs that may arise. It goes without saying that the purchaser is liable for payment of the purchase price of the property to the Seller.
Below is a list of the six most common costs that a purchaser will be liable for when buying a home, unless there is a written agreement between the Buyer and the Seller to the contrary.
- Transfer Costs:
- These are the costs of transfer that are payable to the conveyancing/transferring attorney attending to the registration of transfer of the immovable property into the name of the purchaser. The amount payable will differ according to the purchase price payable.
- Transfer Duty:
- Transfer duty is a tax levied by SARS on all immovable property transactions. The purchaser will be liable for transfer duty levied on the purchase price of the property. The amount of transfer duty payable is reviewed annually.
- As of 1 March 2023, the first R 1,100,000.00 of the purchase price is excluded from the calculation of transfer duty. If the purchase price exceeds R 1,100,000.00 transfer duty will be payable in accordance with the tariff as set out by SARS.
- Levy/Rates clearance certificate fee:
- Purchasers are generally held liable for a portion of the rates and/or levy clearance certificate fee when the conveyancer makes application for clearance figures.
- Certain Body Corporates and Homeowners’ Associations require that the conveyancing/transferring attorney attend to pro-rate the levies between the buyer and seller as a result , the purchaser may be liable for a pro-rated amount in respect of levies.
- Bond Registration Attorney Costs:
- If the purchaser has successfully applied for a mortgage bond (loan) to satisfy the purchase price, a bond registration attorney will be appointed by the mortgagee bank to attend to the registration of the mortgage bond over the immovable property. The purchaser will be liable for the costs of the bond registration attorney. The bond registration attorneys’ costs are calculated on the amount of the mortgage bond.
- Mortgage Bond Initiation Fee:
- The purchaser will be liable to the mortgagee bank for a bond inhiation fee. Such amount can be paid by the purchaser upfront or can be included in your bond amount.
- Occupational Rental:
- If the Seller agrees that the purchaser may take occupation of the property prior to registration of transfer of the immovable property into the name of the Purchaser, the Purchaser will be liable for occupational rental and usage charges, from date of occupation until date of registration of transfer.
