There are additional expenses to buying a home, such as transfer costs. Here’s what you need to know and what you can expect to pay.
Article summary
- When you purchase a property, you have to pay transfer fees to the conveyancing attorney who transfers the property from the seller’s name to yours.
- Transfer costs include the fees paid to the attorney, and the transfer duty paid to SARS (properties worth less than R1 100 000 are exempt from transfer duty).
- Instead of paying transfer costs upfront, you can apply for a 105% home loan, which includes transfer and bond registration costs in the monthly repayments.
Having your home loan application approved is an exciting event, but you need to be aware of the extra costs that go into a property purchase.
Extra costs include the transfer of property cost, and transfer duty, which we explain here.
Note: You can use our Transfer Cost Calculator to determine what the transfer of property process will cost you.
What you need to know about transfer costs
- What is the transfer of property process?
The process of transferring the property from the seller’s name to yours. This is conducted by a conveyancing attorney who is hired by the bank. - Who pays for the transfer of property process?
Although the attorney is hired by the seller, the buyer pays the costs. - What is the difference between transfer cost and transfer duty?
Transfer costs are paid to the conveyancing attorney; transfer duty is paid to SARS.
The former is the attorney’s fee (plus VAT) while the latter is a tax.
Properties worth less than R1 100 000 are exempt from transfer duty.
The transfer of property cost includes:
- The transfer costs: This is paid to the conveyancing attorney and varies depending on the value of the property. The higher the value of the property, the higher the transfer cost.
- Transfer duty: A tax on the transfer of property payable to SARS. This also varies according to the value of the property. The higher the value of the property (from R1 100 000 onward), the higher the transfer duty.
- Deeds office fees: The Deeds Office transfers the property to your name and registers the title deed in your name.
- Post, petties, FICA and other fees (incl VAT).
Calculate your transfer costs
You can use our Transfer Cost Calculator to determine what the transfer of property will cost you.
Our calculator will also tell you the bond registration cost, another additional expense that goes along with the purchase of property.
Can transfer costs be included in the home loan?
There is the option of a 105% home loan, in which the extra 5% covers additional costs like the transfer and bond registration costs, including them in your monthly repayments rather than requiring you to pay them upfront.
Get prequalified so you can budget accordingly
Getting prequalified determines the home loan you will likely qualify for.
You can then use our Transfer Cost Calculator to determine what your transfer costs, transfer duty, and bond registration costs will be, based on the purchase price (assuming that is the same as your home loan).
This enables you to incorporate these additional costs into your budget.
You can get prequalified by contacting an expert at ooba Home Loans or by using our free, online prequalification tool, the Bond Indicator.
