Costs
Brokerage is payable where an estate agent is responsible for concluding a sale of immovable property. Brokerage is customarily payable by the seller who mandates the estate agent to procure a purchaser for the property.
The seller is also responsible for the cost of procuring 'beetle free and electrical compliance' certificates. The purchaser is responsible for the payment of transfer costs and the costs of registering any new mortgage bonds over the property purchased.
Transfer costs include transfer duty payable to the Receiver of Revenue calculated using the following formula, based on the purchase price:
R0 - R500 000 Exempt
5% between R500 000 – R1 000 000
R8% on the balance above R1 000 000
where a natural person purchases the property, shares or members interest in a residential property owning entity; or
8% of the purchase price where the purchaser of the property, shares or members interest in a residential property owning entity, is not a natural person. Attorneys' fees for attending to the transfer and registration of mortgage bonds are calculated according to a tariff.
Further sundry charges are imposed by the Deeds Registry and the Bank granting financial assistance.
Where Transfer Duty is payable, a formula is applicable based on the value of the property. Transfer Duty normally constitutes the majority of the costs and is usually payable by the Purchaser.
Transfer Duty is also payable on the transfer of a member's interest or shares in a company or beneficial interest in a trust. Where the Purchaser of the interest or shares is a natural person, Transfer Duty is charged on a sliding scale while an entity other than a natural person pays Transfer Duty at a flat rate of 10% of the purchase price.
VAT
No Transfer Duty is payable if the Seller is registered as a VAT vendor on date of registration, in which event the Seller is liable to make payment of the VAT, charged at 14%, to the Receiver. The VAT is deemed to be included in the purchase price, unless specified to the contrary in the agreement. In the latter event the Purchaser will have to pay the VAT in addition to the purchase price.
RATES AND LEVIES
Whilst not a cost of transfer, rates and levies must be paid in full on date of transfer. A pro rata (normally to date of possession) portion of the charges is payable on the fixed property to the relevant local authority or the levies payable to the Body Corporate in the case of a sectional title unit.