What is the difference between transfer fees and transfer duty

Buying a home is the biggest financial commitment that most people will make in their lifetime. Transfer fees and bond registration cost are probably the biggest costs associated with buying a home. For example, on a R1 million bond for a R1 million freehold property, with the seller not VAT registered and the purchase being conducted by a natural person, the transfer cost estimate would be R24 incl.

VAT and the bond registration cost estimate would be R30 incl. Transfer duties only apply to properties worth more than R1 Article summary Purchasing a home includes additional expenses aside from the home itself. The money is then paid over to the bank, or directly to the seller if you are not taking out a home loan to purchase the property. The interest accrued on this amount while being in the trust account, is paid back to you. Description: Registering Bond Conveyancer's Fees are for the service the Registering Bond Attorneys provide to get your bond registered over the title deeds.

Estimated Amount: The amount varies according to your home loan amount. The fee is based on tariffs recommended by the Law Society, but may differ slightly from one law firm to another. Description: The Registering Bond Attorneys charge a levy to cover small things like posting documents to other conveyancers, the bank, the estate agent, the Deeds Office, to you, etc.

Estimated Amount: The amount is usually fixed. Each different law firm has it's own rates. We have taken an average from several conveyancers, at R 1 VAT per bond. Description: This fee is charged by the Deeds Office for the legal registration of your mortgage bond.

Estimated Amount: The amount is fixed according to the amount of your home loan. Description: Transfer Duty is a Government Tax levied to transfer the property from the seller's name into the buyer's name. It generally constitutes the major portion of the costs involved. In such a case, the seller must have included VAT in the purchase price. This is usually the case when buying property in a new development — the developer is generally VAT registered.

The Transfer Duty rates applicable have changed as per the Budget. These are the updated Transfer Duty rates applicable on property acquired on or after 1 March You don't pay transfer duty on the first R 1 Description: Transferring Conveyancer's Fees are for the service the Transferring Attorneys provide to get your new home transferred from its old owner to you, and to get the property registered in your name. Estimated Amount: The amount varies according to the purchase price of the property.

Description: The Transferring Attorneys charge a levy to cover small things like posting documents to other conveyancers, the bank, the estate agent, the Deeds Office, to you, etc. Description: This fee as charged by the Deeds Office for the Title Deed and legal transfer and registration of your new home into your name.

On a bond of:. Description: A Home Loan Initiation Fee is charged by the bank for the processing of the home loan application. This amount is usually still payable even if the home loan is rejected by the bank. It will be in your best interest to budget for this amount. Who to pay: The amount will most likely be debited to your home loan account added to your outstanding balance. Description: The Administration Fee is charged by the bank to administer the home loan account.

Estimated Amount: You can expect to pay around R Description: The bank will insist that you take out a Homeowner's Insurance Policy to cover the property and the permanent structures on it, against natural disasters like fire or storm damage. Estimated Amount: The amount depends on the outstanding balance of your home loan. Buying a home is an overwhelming enough task without being hit by unforeseen costs.

The best way of avoiding unpleasant and costly surprises is by carefully looking at your affordability and making use of convenient tools such as transfer cost calculators and bond calculators to simplify the process. Buying a new property is simultaneously an exciting and stressful experience. One of the important processes that can be quite overwhelming for buyers is the bond application process which is a key element of most property purchases which is why you should get your ducks in a row to have the best chance of success.

To take the mystery out of bond settlement costs, we have put together this brief overview so that sellers can plan appropriately and avoid being caught off guard. Extending finance on a home loan is possible in two ways: accessing funds under security of the already registered bond or, should the security provided under this bond not be sufficient, a second bond can be registered.

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