Hidden and Additional Costs for Buyers and Sellers

Property transactions involve specific responsibilities and financial obligations for both buyers and sellers. Many of these are essential components of the conveyancing process. To avoid unexpected surprises, we've outlined the most common costs and requirements below. Being informed and financially prepared from the start is key to ensuring a smooth transaction.​

For the Buyer

1. Deposits
   Buyers should be aware that deposits are often required when purchasing stands, farms, or, in some cases, houses. Banks are generally reluctant to provide full bonds on these types of properties. While deposit requirements may vary depending on the bank and market conditions, as a guideline, buyers can expect:
2. • Houses: ±20% of the total purchase price​
   • Stands: ±40%​
   • Farms: ±50%​

The exact deposit amount will be discussed with your estate agent before the Offer to Purchase is signed and will be clearly stated in the agreement.

2. Transfer Fees
   These are payable to the conveyancing attorney and are calculated according to a sliding scale set by the Law Society. In addition to the attorney’s fee, this cost may include:
3. • Disbursements ("post and petties")​
   • Municipal rates​
   • Homeowners’ levies (if applicable)​

Municipalities require three months’ rates to be paid in advance to cover the period between the issuance of the clearance certificate and the actual registration of transfer. The conveyancer will apportion this amount between buyer and seller, depending on the transfer date.

3. Transfer Duty
   This is a government tax payable to SARS for the transfer of the property into the buyer’s name. As of 1 April 2025, the transfer duty rates are:

   or example, if you purchase a property valued at R2,000,000:

a.    The first R1,210,000 is exempt from transfer duty.​

b.    The next R453,800 (from R1,210,001 to R1,663,800) is taxed at 3%, totalling R13,614.​

c.     The remaining R336,200 (from R1,663,801 to R2,000,000) is taxed at 6%, totalling R20,172.​

d.    Total Transfer Duty: R13,614 + R20,172 = R33,786.​

4.     VAT
If the seller is a VAT-registered entity and the property is not sold as a “going concern,” then VAT will be payable instead of Transfer Duty. Note: Only one of the two – either VAT or Transfer Duty – is payable, never both.

5.     Bond Costs
Bond registration costs are calculated on the bond amount (i.e. the purchase price minus the deposit). These costs vary between banks. Some institutions charge an initiation fee, while others may include it in the bond amount. It is advisable to consult your bond originator or banker to understand all applicable charges.

For the Seller

The seller is responsible for obtaining and paying for the following:

1. Bond Cancellation Fees
   If a bond is currently registered over the property, the seller must give the bank at least three months’ notice of cancellation. Failure to do so may result in a penalty fee.
2. Compliance Certificates
   These include:
3. • Electrical Certificate of Compliance (including electric fencing, if applicable—even for solar-powered systems)​
   • Gas Certificate of Compliance (if any gas installations are present)​
3. Rates Clearance Certificate
   This is a legal requirement from the municipality before transfer. All outstanding rates must be paid in full, along with an additional three months’ rates paid in advance. This amount is later apportioned between buyer and seller according to the date of registration.
4. Homeowners’ Clearance Certificate
   Applicable in estates and complexes, this certificate confirms that all levies have been paid in full. The transferring attorney will apply for this from the relevant body corporate or homeowners' association.
5. SPLUMA Certificate (Mpumalanga)
   Required by the municipality, this certificate confirms that the structures on the property match the approved plans on record. Approved building plans are a prerequisite. If they are missing, the seller may need to have them redrawn and resubmitted for approval.
6. Agent’s Commission
   This is paid from the proceeds of the sale and will be disbursed by the conveyancing attorney directly to the estate agency.