Hidden & Additional Costs When Buying or Selling a Property

by | May 17, 2022 | Latest News, Residential Homes | 1 comment

Hidden and Additional Costs for Buyers and Sellers

There is certain responsibilities and obligations for sellers and buyers that need to be addressed during a property transaction and in some instances, are required as part of the conveyancing process. We have detailed these to ensure that there are no surprises. It is vital that each party is financially prepared for the costs and is aware of the various elements that need to be considered to start the process.

The Buyer
  1. Deposits – Buyers are not always aware that deposits are required in purchasing stands, farms and in certain instances houses. Banks are very reluctant to give full bonds on these properties.

These do vary from time to time and do vary between the different banks, but an estimated deposit percentage to work on would be:

Houses 20% of the total purchase price; Stand 40%; Farms 50%.

The decision as to how much a deposit will be, will be discussed with your agent prior to putting in the Offer to Purchase and will then be clearly stated in the Offer.

Aside from the deposit requirements, buyers need to prepared for several other costs, which will include:

  1. Transfer fees – payable to the conveyancer attorney,  the fees are variable and based on guidelines issued by the Law Society of South Africa. This also includes an additional amount for “post and petties”. A pro rata amount for Municipal rates and Homeowners levies may be charged, if applicable. Municipalities require payment of rates for three months in advance to cover the period between the clearance certificate and the actual transfer of the property. The conveyancing attorney will apportion liability for these rates paid in advance, between the buyer and seller, depending on transfer date and credit will be given accordingly.

The transfer fees are calculated on the value of the property.

  1. Transfer Duty – is a government tax, levied to transfer the property from the seller’s name into the buyer’s name and is payable to SARS. Transfer Duty will not be payable on properties being sold for less than R 1,000,000
Property Value Rate
​1 – 1000,000​ ​0%
1,000,001 – 1,375,000 ​3% of the value above R1,000,000
1,375,001 – 1,925,000 ​R11,250 (being the 3% as above) + 6% of the value above R1,375,000
1,925,001 – 2,475,000 ​R44,250 (being the total of the above figures) + 8% of the value above R1,925,000
2,475,001 – 11,000,000 ​R88,250 (being the total of above figures) + 11% of the value above R2,475,000
​11,000,001 and above ​R1,026,000 + 13% of the value exceeding R11,000,000


  1. VAT – should the property be owned by a VAT registered entity, and not being sold as a “going concern” then payment of VAT would be applicable instead of Transfer Duty. EITHER VAT OR TRANSFER DUTY IS APPLICABLE – NEVER BOTH.
  1. Bond Cost – Mortgage Bond costs will automatically be calculated on a bond amount which is the difference between the purchase price and the deposit paid. The Bond costs vary from bank to bank. Some banks will charge an “Initiation Fee” while other banks will include this in the bond amount to be paid back. Our advice would be to discuss the charges with a bond originator or your banker.
The Seller

The Seller is responsible for obtaining and paying for:

1. The Seller is liable for some conveyancing costs related to the transfer of the Property into the Purchaser’s name, which may include, the FICA verification fee (dependent on the conveyancing firm), correction of incorrect title deed should there be errors in the original title deed and the costs associate to obtain a copy of a lost title deed.

2. Bond Cancellation fees where a bond is currently held over the property. It is critical that the Seller gives notice to the bank of his intention to sell the property as soon as possible. Should the bond be cancelled within a three-month period of notice being given, the Seller will pay a penalty fee. A bond cancellation attorney will be appointed by the bank where the bond is held, the seller is liable for payment of the bond cancellation attorneys fees.

3. All compliance certificates for the property. These would include, an electrical certificate of compliance for all electrical installations including an electric fence, if applicable. This applies even where the source of the electricity is solar. A certificate of compliance is also necessary for all gas installations. Most service providers charge an inspection fee to establish if the installations are compliant and further fees for repairs, if necessary and issuing of the certificates.

4. A rates clearance certificate from the Municipality is required before a property can be transferred to the Purchaser and therefore any outstanding rates must be paid. Plus an addition amount equating to three months rates also have to be paid between the Seller and the Purchaser. This covers the period between the clearance certificate being issued and the transfer of ownership being registered, which could be anything up to two months. The appropriate party is refunded once this period has been established, so that only the party that has ownership will be held liable for the rates;

5. Where appropriate, a Homeowners Clearance Certificate is required. The clearance figures will include any outstanding levy amounts and may include an additional 1 – 3 months (advance) levies, dependent on the HOA. The transferring attorney will attend to obtaining same with the relevant estate and will only be issued once the clearance figures have been paid in full.  The conveyancer will credit the seller on a prorate basis should transfer take place before the clearance certificate expires.

6. Mpumalanga requires a SPLUMA (Spatial Planning and Land Use Management) certificate which is issued by the local Municipality. The purpose of this certificate is to ascertain that the infrastructure on the property correlates with the approved plans that they have on record. Hence approved plans are a requirement, if house plans are not available, then there may be a cost in having them re-drawn and getting Municipal approval. The Seller will  be liable for the payment of all costs related to obtaining the Spluma (Spatial Planning and Land Use Management) certificate, including but not limited to the application fee and the cost of appointing a third party correspondent.

7. Agents commission – this is payable from the proceeds of the Purchase Price and will be paid out by the conveyancer directly to the Agency. The amount will be clearly stated in the Offer to Purchase.

The conveyancer and/or your estate agent will guide you as to when these amounts are due and assist in the process of getting all amounts paid and certificates issued.

If you have any questions, please feel free to contact us on info@zestpropertygroup.co.za and one of our agents will get back to you!

Best of luck!