Page 26 - Nexia SAB&T Property and Tax Guide 2025

COSTS OF BUYING & SELLING PROPERTY

TYPICAL COSTS OF BUYING
PURCHASE PRICE
◆ A deposit (usually 10% of the gross purchase price) to the estate agent or
conveyancer payable usually on signature of the deed of sale by both parties or
within 7 to 14 days from signature (if applicable).
◆ The balance of the purchase price is lodged with the conveyancer prior to transfer,
or is secured by way of a bank guarantee. Over and above the purchase price, the
purchaser should have the cash available to cover the transfer costs (if this is not
included in the bond) and the bond registration costs as follows:
TRANSFER COSTS
◆ Transfer duty – calculated on a sliding scale between 0% to 13% of the gross
purchase price, is payable to SARS (R0 to R1 210 000 is exempt).
◆ If the seller is a VAT vendor, then VAT is payable at 15% of the purchase price.
As the seller is liable for payment, it is important to add the VAT to the purchase
price, and to state clearly whether the agreed purchase price includes or excludes
VAT. If nothing is stated, it is deemed to be inclusive of VAT, and the seller will be
liable for VAT at the “tax fraction” (which equates to 13.04% of the gross price).
◆ The transaction may be zero-rated only when an income generating entity, which is
also a going concern, is sold from a VAT vendor to a VAT vendor.
◆ Conveyancing fees – of the transferring attorney, may vary slightly according
to rates set by the conveyancer who attends to the transfer, but are based on
recommended fee guidelines from the law society (plus VAT).
◆ Bond registration costs – the purchaser normally pays the transfer and bond
registration costs (plus VAT).
◆ Other costs – the bank may also charge a bond initiation fee – usually a base
fee plus % of the loan amount, which is usually debited off home loan account.
A homeowners insurance policy (to cover property and structures on it against
natural disasters), home loan protection assurance (death, disability), moving
costs, and telephone and internet connection costs may also need to be taken
into account.
◆ Deeds office /registration fees – a fee which varies dependent on purchase
price /value of property.
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