A very important thing to always consider when buying a new property, are the additional purchase costs #BuildALegacy
In Build a Legacy we take an in-depth look at all the additional charges you need to be aware of. Here are just a few to always keep top of mind.
Transfer costs can be divided into three costs:
- Conveyancingcosts – the cost of transfer attorneys to get all the legal processes and paperwork prepared for purposes of registration of property into your entities’ name with the Deeds Office.
- Bond registration costs– the cost of bond registration attorneys to register the bond or mortgage.
- Transfer duty– the duty levied on the property transaction by the Receiver of Revenue (SARS).
It is always important to consider these costs in your investment plan. I have seen people who failed to budget for these costs from the outset. They later had to give up a proportion of their deposit in penalties after they pulled out of the deal due to miscalculations in the purchase price.
Additionally, these are costs that should be included in your calculation of returns on your property. Purchase costs affect the cash flows, both annual and monthly and should be considered at all times.
In South Africa, it is possible to get an approximation of transfer costs from transfer attorneys. In fact, approximate costs are available on numerous estate agency websites, bank calculators and transfer attorneys’ websites. You can use these tables to know the approximate outlay for the transfer cost and budget for it beforehand.