Attorney Conveyancer and Notary Public,
practising as Desai and Associates
WHAT ARE THE COSTS INVOLVED?
The costs relating to the transfer of fixed property fall into three main categories:
Transfer duty or Value Added Tax – where transfer duty is payable to the Government it is calculated as follows: nothing on the first R500,000,00 of the purchase price, 5% on the balance of the purchase price between R 500 001 up to R1 000 000,00 and thereafter 8% on the amount above R1 000 000,00 in the case of natural persons, (properties sold for less than R500 000,00 are exempt from transfer duty) and 8% where the purchaser is a company or close corporation. VAT is currently payable at the rate of 14% of the purchase price.
A pro rata portion of the rates payable on the property to the relevant local authority (or a pro rata portion of the levies payable to the Body Corporate in the case of a flat (plus Value Added Tax where applicable). Pest clearance and electrical compliance certificates together with any costs involved in making the house fit for the issue of such certificates are usually the responsibility of the seller.
The conveyancer’s fee is determined by a guideline tariff but the amount of the fee may be negotiated with the conveyancer.
Where a bond is to be registered, the purchaser will have to pay the stamp duty payable on the bond (0,2% of the amount secured by the bond) an amount charged by the financial institution for the inspection of the property, provisional interest and insurance premiums and the conveyancer’s fee (calculated on a sliding scale based on the amount of the bond).
Who arranges these transactions?
Having carried out the necessary searches in the deeds office and having checked all the details of the property and parties to the transaction, the conveyancer prepares the title deed and other necessary documents and on behalf of the purchaser pays the Receiver of Revenue and of both the seller and purchase the local authority.
Once the documents have been signed by the purchaser and the seller, and the purchaser has paid the costs and made satisfactory provision for the payment of the purchase price, the conveyancer can proceed with the registration of transfer of the property in the purchaser’s name. (He will only do so, however, once the purchase price has been paid or secured).
What happens with the trust monies?
Section 78(2a) of the Attorneys Act specifically makes provision that an attorney, at the instruction of any person, may open a trust savings or other interest bearing account and the interest is paid out according to instruction. These funds are protected by the Attorneys Fidelity Fund. The attorney may charge a fee for this service.
Ridwaan Desai could be contacted on email@example.com
Next Column : What happens at the Deeds Office