When looking to buy a new home or property, many of us tend to look solely at the actual house/property price and completely forget all the other more 'hidden' costs lurking around the corner of any purchase. Things to consider:
Transfer duty is the Government levied tax on property transactions - more specifically, the transfer of ownership of all fixed property. Your transfer duty depends on a number of things, namely if you are buying as a company, a close corporation or a trust, OR as an individual.
For the first, the transfer duty is levied at a flat rate of 10 per cent of the purchase price. But if you are buying as an individual, the amount is calculated on a sliding scale:
Up to R750 000.00 = Zero % Transfer Duty.
From R 750 001.00 to 1 million = 3% Transfer Duty.
Above R 1 000 001.00 to R 1 500 00 = R 12 000 + 5% Transfer Duty.
R 1 500 001 and Above = R 37 000 + 8 %
If you are buying a property to a developer registered in VAT (Value Added Tax), you will pay VAT instead of the transfer duty.
The purchaser pays the Conveyancer’s fee even though it is usually the seller who appoints the attorney. This fee, prescribed by the Law Society of South Africa, is calculated on a sliding scale and amount to between 1 and 2 per cent of the purchase price of the property.
Other fees that are usually added in the Conveyancer’s bill are things like a "Property Search" fee to cover the Deed Search (around R75 to R200 plus VAT.), "Postages and Petties" costs that cover their in-house administration costs of the process (around R250-00 and R700-00 plus VAT) and FICA registration (between R200-00 and R550-00 plus VAT).
Bank inspection fees are around 0.2 per cent of the valuation, and the bond arrangement fee is around 1 to 1.5 per cent of the loan amount.
If you buy a new property,look out for electricity, gas (although not often) and water connection fees that must usually be paid for. Investigate the costs of connecting these services if they are needed.
Other fees might include surveyor’s or inspection fees, architect’s fees and the cost of moving house - a significant cost one if you are moving from far away! Besides these you must also not forget the actual running costs of the property. You don't want these to rule your life.
Things to consider: Local property rates and taxes, insurance (building & contents), utility fees, community fees (like property, garden and pool maintenance costs, and/or a caretaker’s fees if applicable).