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PROPERTY TALK
For the Buyer
The has been much confusion for the Buyer regarding the different terms used while buying a property; more specifically around the legal and transfer side. This should help clear up the confusion on the different terms.
TAX: Recently the Finance Minister announced a increase in the value that you can buy for without having to pay Transfer Duties. Property’ s with the value of R900,000 and less are exempt of the Transfer Duty. This increased from RR750,000. I have had many buyers thinking it is an opportunity to purchase a property without being liable for certain costs. Unfortunately that is not the case. The Transfer Duty is simply the tax due to the government on the purchase of a property.
The saving to the Buyer for property under R900,000 would be a saving of about R4,500 … a small amount compared to the other costs. Anything over that value will be susceptible to Transfer Duty.
ATTORNEYS: Other fees that apply on the purchase of a property would be the Transfer Fees. The Transfer Fees is the bulk of the costs for a Buyer. This is the fees payable by the Buyer for the transfer of the property into their name by an attorney. This attorney will be appointed by the Seller.
The smaller yet additional cost is what is termed as“ FICA, Postal and Petties”. This is normally around R1,500 and is in general an admin fee incurred.
BANKING: If you are a cash Buyer; then this is where your costs would end. Unfortunately if you are like most Buyers then you will require a bond.
Banks have fees which are charged on the initiation of a bond and the fees are somewhat similar to the Transfer Fees( More for properties under R1,000 000).
SUMMARY: Transfer Fee
Attorneys Costs
Transfer Duty
Tax levied on behalf of the government Bond Registration Banking Fees FICA, Postal, Petties Admin Fees( Attorneys and Banks)
Handy Tips �
It is wise to save for your costs so that you may use the full value of your bond for the purchase.
For more advice on property options and the due process of buying,
selling and investing …
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The rule of the thumb is to save R50,000 per R1,000 000 property value.
Having a deposit to contribute to your bond application will help to reduce your Banking Fees as it is value based
Having a deposit above costs is generally wise as it allows you to have some influence on negotiating the interest rate of the bond.
Marc van Heerden Cell: 073 198 9369 Tel: 041 360 0365 marcv @ sothebysrealtype. co. za www. sothebysrealty. co. za Each office is independently owned and operated
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