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Here's an expanded and detailed explanation of what the buyer and seller are responsible for paying in a South African property transfer:
🔵 BUYER'S COSTS (in detail):
1. Purchase Price
- This is the amount agreed upon in the Offer to Purchase (OTP).
- It’s usually paid into the conveyancer’s trust account and only released to the seller upon successful registration of transfer.
2. Transfer Duty (Paid to SARS)
- A tax payable on property purchases over R1,100,000 (as of 2025).
- Calculated on a sliding scale.
- Example: For a R2,000,000 property, the buyer would pay around R37,500 in transfer duty.
- First-time buyers should always check if they qualify for exemptions or rebates.
3. Transfer (Conveyancing) Attorney Fees
- These are legal fees for the attorney appointed by the seller to handle the property transfer.
- The buyer is responsible for paying this fee, which is based on the purchase price.
- The higher the price, the more the fee.
- Also includes VAT, and an additional charge for disbursements like postage, FICA verifications, etc.
4. Bond Registration Costs (if financing with a loan)
- If the buyer takes a home loan, the bank appoints a bond attorney to register the mortgage.
- The buyer pays this attorney’s bond registration fee, also linked to the bond amount.
- There is also a once-off bank initiation fee (around R6,000 – R7,000).
5. Deeds Office Fees
- A government charge for registering the transfer and/or bond with the Deeds Registry Office.
- The amount depends on the value of the property and is paid by the buyer.
6. Occupational Rent (if applicable)
- If the buyer moves in before registration is complete, they usually pay occupational rent to the seller.
- The amount is typically specified in the OTP and is often calculated as 1% of the purchase price per month.
7. Pro-Rata Rates and Utilities
- The seller pays rates in advance, but the buyer reimburses them for any portion after the transfer date.
- Applies to municipal rates, water, electricity, etc.
🔴 SELLER'S COSTS (in detail):
1. Estate Agent’s Commission
- Paid by the seller upon successful registration.
- Typically ranges from 5% to 7.5% of the selling price (plus VAT).
- Deducted by the conveyancer directly from the proceeds before paying the seller.
2. Bond Cancellation Costs
- If the seller has an existing home loan, it must be formally cancelled by the bank.
- A bond cancellation attorney (appointed by the bank) handles this, and the seller pays a cancellation fee (± R3,000–R5,000).
- The bank also requires 90 days’ notice, or they’ll charge penalty interest.
3. Rates Clearance Certificate
- Required by the municipality to confirm that all rates, refuse, sewerage, water and related charges are fully paid.
- The seller typically pays 2–3 months in advance.
- Any unused portion is refunded to the seller after registration.
4. Compliance Certificates
These are mandatory in most transfers. The seller must pay for and provide:
- Electrical Certificate of Compliance (COC) – valid for 2 years.
- Beetle Certificate – required in coastal areas.
- Gas Compliance Certificate – if gas appliances are installed.
- Electric Fence Certificate – if applicable.
- Plumbing Certificate – required in Cape Town.
If the property fails inspection, the seller must fix the issues before certificates are issued.
5. Capital Gains Tax (CGT)
- Applies if the property is not the seller’s primary residence, or the gain exceeds R2 million.
- Tax is payable on the profit (capital gain) and is declared in the seller’s tax return.
- SARS calculates CGT based on market value, purchase price, and qualifying expenses.
✅ WHO PAYS WHAT – QUICK RECAP
| Item | Buyer Pays | Seller Pays |
|---|---|---|
| Purchase Price | ✅ | ❌ |
| Transfer Duty (SARS) | ✅ | ❌ |
| Transfer Attorney’s Fees | ✅ | ❌ |
| Bond Registration (if loan is taken) | ✅ | ❌ |
| Bank Initiation Fees | ✅ | ❌ |
| Deeds Office Fees | ✅ | ❌ |
| Occupational Rent (if early occupation) | ✅ | ❌ |
| Municipal Rates Advance Refund | ✅ (reimburse) | ✅ (pay upfront) |
| Estate Agent Commission | ❌ | ✅ |
| Bond Cancellation Fees & Penalty Int. | ❌ | ✅ |
| Compliance Certificates & Repairs | ❌ | ✅ |
| Capital Gains Tax | ❌ | ✅ |
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