Most of the costs associated with property transactions are for the buyer’s account but there will be some costs you need to prepare for.
Bond cancellation costs: If you have a bond on the property, there will be a cost to cancelling the bond. This varies between banks but prepare to pay over R4 000. Compliance costs: Compliance certificates, which include electrical, gas, plumbing, beetle and electric fences, are the seller’s responsibility and must all be in order before a property can be transferred. Budget for at least R500 per certificate.
Agent’s commission: The agent’s commission is the seller’s responsibility and is usually calculated as a percentage of the purchase price. Rates, taxes and levies: The conveyancing attorneys will require a clearance certificate from the local authority stating that all rates and taxes are fully paid. Sometimes the seller will have to make future-dated payments of between two and six months in advance. The amount will be based on past accounts. If, however, the property is registered to the buyer in a shorter time the council will refund the seller.
Other costs: A cost that does not apply in all cases is capital gains tax, which is the tax payable on the disposal of an asset (your property) where the proceeds exceed the base cost. Also, don’t forget to take the cost of moving your things from one property to another into account. You may also want to consider taking insurance on the things being moved. – Giel Viljoen, principal at Leapfrog Stellenbosch