Transfer and Hidden Costs Flashcards
What do transfer costs include?
- transfer duty
- transfer fees/conveyancing fees
- Deeds Office fees
- postage
What does financing relating to a bond include?
- bond registration costs (including VAT)
- Deeds Office fees
- postage
- petties
- initiation fee
- property valuation fee
What are some other hidden fees?
- interim interest
- occupational rent
- moving expenses
- service connection fees
What are transfer duties?
- a tax collected by the Receiver of Revenue on behalf of the government
- paid to SARS every time a property changes hands
What are transfer duties based on?
- the value of the property
- if a property is purchased from a developer, no transfer duty is payable
What is a developer?
- individual or company who buys a piece of land and develops it into a housing complex
What are transfer fees/conveyancing fees?
- funds paid to the attorney who oversees the transfer process of the property
How are transfer fees/conveyancing fees calculated?
- calculated on a regulated sliding scale based on purchase price
How must transfer fees be paid?
- upfront
What are the requirements of the conveyancer?
- 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
What is registration in terms of housing?
- the process whereby the ownership of the house is transferred from the seller to the buyer
What are bond registration fees?
- fees charged by the attorney who draws up the bond document
- so that the bond is registered in the buyer’s name
What is the buyer responsible for in terms of bond registration fees?
- bond registration fees before the registration
- or included in the home loan amount
What is a stamp duty?
- taxed included in the home loan amount
Where does the attorney register the bond and how long does it take?
- registers the bond at the deeds office
- can take between 8 and 12 weeks
What is the deeds office?
- the government department responsible for the registration of the transfer of houses and immovable properties
What are Deeds Office fees?
- fees charged by the deeds office for registering the mortgage bond and the title deed
What is a title deed?
- the legal document that proves you are the owner of the property
- includes location and size of property
- as well as owner’s particulars
What are interim rates?
- interest that has to be paid before the registration of the bond
- if there is an unforeseen delay in the registration of the bond
What is an initiation fee?
- once-off fee charged by the bank
- for preparing the documents and processing the loan application
What are property rates?
- 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
What are property valuation fees?
- the fee charged by the bank to asses the property
What is occupational rent?
- 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
What are administration fees?
- a monthly administration or service fee on loans for residential property
- can be charged by the bank
What are moving expenses?
- the amount budgeted for a removal company and other related expenses
- e.g. new curtains
What are service connection fees?
- a deposit that must be paid by homeowners
- for the connection of water and electricity supply
- as well as the connection of a telephone
What do variable costs from the attorney include?
- FICA fees
- electronic instruction fees
- postage
- typically total around R2000
