Transfer and Hidden Costs

Question 1

What do transfer costs include?

Answer 1

• transfer duty
• transfer fees/conveyancing fees
• Deeds Office fees
• postage

Question 2

What does financing relating to a bond include?

Answer 2

• bond registration costs (including VAT)
• Deeds Office fees
• postage
• petties
• initiation fee
• property valuation fee

Question 3

What are some other hidden fees?

Answer 3

• interim interest
• occupational rent
• moving expenses
• service connection fees

Question 4

What are transfer duties?

Answer 4

• a tax collected by the Receiver of Revenue on behalf of the government
• paid to SARS every time a property changes hands

Question 5

What are transfer duties based on?

Answer 5

• the value of the property
• if a property is purchased from a developer, no transfer duty is payable

Question 6

What is a developer?

Answer 6

• individual or company who buys a piece of land and develops it into a housing complex

Question 7

What are transfer fees/conveyancing fees?

Answer 7

• funds paid to the attorney who oversees the transfer process of the property

Question 8

How are transfer fees/conveyancing fees calculated?

Answer 8

• calculated on a regulated sliding scale based on purchase price

Question 9

How must transfer fees be paid?

Answer 9

• upfront

Question 10

What are the requirements of the conveyancer?

Answer 10

• must be qualified to prepare the documents
• and to attend to the transfer of a fixed property
• as well as the registration of the mortgage bond

Question 11

What is registration in terms of housing?

Answer 11

• the process whereby the ownership of the house is transferred from the seller to the buyer

Question 12

What are bond registration fees?

Answer 12

• fees charged by the attorney who draws up the bond document
• so that the bond is registered in the buyer’s name

Question 13

What is the buyer responsible for in terms of bond registration fees?

Answer 13

• bond registration fees before the registration
• or included in the home loan amount

Question 14

What is a stamp duty?

Answer 14

• taxed included in the home loan amount

Question 15

Where does the attorney register the bond and how long does it take?

Answer 15

• registers the bond at the deeds office
• can take between 8 and 12 weeks

Question 16

What is the deeds office?

Answer 16

• the government department responsible for the registration of the transfer of houses and immovable properties

Question 17

What are Deeds Office fees?

Answer 17

• fees charged by the deeds office for registering the mortgage bond and the title deed

Question 18

What is a title deed?

Answer 18

• the legal document that proves you are the owner of the property
• includes location and size of property
• as well as owner’s particulars

Question 19

What are interim rates?

Answer 19

• interest that has to be paid before the registration of the bond
• if there is an unforeseen delay in the registration of the bond

Question 20

What is an initiation fee?

Answer 20

• once-off fee charged by the bank
• for preparing the documents and processing the loan application

Question 21

What are property rates?

Answer 21

• fees that the buyer is responsible for
• for the portion of the year between the registration of the property and the date on which the next annual property rates are due

Question 22

What are property valuation fees?

Answer 22

• the fee charged by the bank to asses the property

Question 23

What is occupational rent?

Answer 23

• rent that must be paid to the seller if the buyer occupies the property before the bond is registered
• this amount should be in line with the market-related rental for the property

Question 24

What are administration fees?

Answer 24

• a monthly administration or service fee on loans for residential property
• can be charged by the bank

Question 25

What are moving expenses?

Answer 25

• the amount budgeted for a removal company and other related expenses
• e.g. new curtains

Question 26

What are service connection fees?

Answer 26

• a deposit that must be paid by homeowners
• for the connection of water and electricity supply
• as well as the connection of a telephone

Question 27

What do variable costs from the attorney include?

Answer 27

• FICA fees
• electronic instruction fees
• postage
• typically total around R2000