costs when selling a house in south africa

Compliance Certificates: These include the Electrical Certificate of Compliance (COC) and can cost anything from R1200 upwards, depending on the amount of work that is needed. The selling costs can be divided into five main categories, each of which include a number of costs that may or may not apply. They are also unavoidable. The average national price for an entry-level home (80–140 sqm) is around ZAR 937,000, with an average medium-size house currently costing around ZAR 1,255,000. Until the launch of Steeple, South Africa’s first online estate agents, in 2012, selling your house in South Africa meant you only had a choice between these two ways to sell property (namely, using a traditional estate agent or selling privately). The costs that you should be aware of include advertising, obtaining a rates and taxes clearance certificate, bond cancellation fees, obtaining compliance certificates, estates agents commission, and capital gains tax. Staff Writer 11 August 2019. “While it may seem like a practical and affordable idea to privately advertise your property instead of using an agent, this decision could end up costing you a lot of time and much more money than what the agent’s commission would’ve been in the first place. The followings costs are to be covered by buyers: Transfer costs to the transferring attorney. Once you have your requirements in mind, you can begin the house … Some costs attached to the bond cancellation process for sellers include: A penalty fee if you failed to provide 90 days’ written notice to the bank of your intention to sell the home. Please refer to the latest edition of Property Power for up-to-date information. Tips on how to make sure paying agent commission goes as smoothly as possible. How to avoid the dreaded ‘double-commission’ disputes. The information contained on this website is aimed at providing members of the public with guidance on the law in South Africa. Estimate these expenses before the decision about selling your property is finalised so you know how much will be left over in your bank account after you sell. Press • Jan 22, 2019. For corporate taxpayers or other trusts, no exemptions are available! If you are looking for your dream property in South Africa, you have come to the right place! Buying, Renting, Selling, Finance, Guest Experts, Courses, Home Owners. For example, if your home loan is R 150 000.00 and below, the fee is R 310.00. Personal savings topped finance agendas this month. Reasons for selling. We suggest you upgrade your browser to one of the many newer and more secure options that are now available. They will ensure that the potential buyer is not a security threat before he she arrives to view your home. The costs involved in selling a house can add up quickly, and selling a house in South Africa costs a fair amount, which is why you need to be prepared for every process that will come your way. Municipality final figures: As the seller you will need to pay around four months extra on your rates and services. The first step is to ensure you know what you can afford, and the kind of home you wish to purchase. Buying a property of R1.5 million with a 100% bond will attract transfer fees as mentioned above of around R88 000”. My advice is to pay extra into your bond every month to bring it down faster. This new certificate will be mandatory when selling your home in South Africa – here’s what you need to know . These are the major costs of selling property: the estate agent’s commission for selling the property. This is paid to the Cancellation Attorneys for cancelling your existing bond. Although Capital Gains Tax (CGT) only applies on the gain from the disposal of a property, the gain takes the purchase cost into account. An Electrical Compliance Certificate is required by law for the property to be transferred to the buyer's name. House buying costs in South Africa. Internet Explorer is a very old browser that is no longer supported by Microsoft. What it takes to start a career in real estate. Real estate market in South Africa House prices have been relatively stable in South Africa, with homeownership levels at around 60% of the population. Not to mention, if you are a home flipper in the making, you will be more than thrilled to have acquired a new asset to spruce up and sell for a profit. Agents perform various duties and have knowledge of legislative procedures that an owner will not necessarily even be aware of. As the seller of a property, you will have to pay the following: The commission that you agreed to pay to the estate agent – this should be agreed to in advance and is sometimes a fixed fee and sometimes a percentage of the selling price; the recommended rate is … 2020 Cost of selling a house in Australia – state by state guide. It is common knowledge that the purchaser is responsible for the payment of the transfer costs and bond registration costs (if applicable) during the transfer process. This article originally appeared in Property Power 11th Edition Magazine. You can work out the fees on properties you’re considering by using ooba’s bond and transfer calculator. 3. This is usually a percentage of the selling price. Sectional title clearance figures from the Body Corporate (for sectional title units): This could be a Special Levy which needs to be fully paid before the Body Corporate will issue a clearance certificate. But to give you an idea, on a R1 million bond for a freehold property, with the seller not VAT registered and the purchase being conducted by a natural person, the bond registration cost estimate would be R27 018 (incl. To maximise sale price, many agents recommend professional styling and basic maintenance around the property. These costs can have a big impact for first buyers and for our many foreign readers may come … When we are young we do not dream about the twenty years that it may take to pay off a bond. So you decided to sell your property and you are dreaming of what you are going to buy with the profit you will be making. As the seller of a property in SA, you have to pay these costs if they apply to you: Municipal rates and taxes, and often costs for services (such as electricity and water) for up to 4 months in advance ; Body corporate or Homeowner’s association levies, in advance; Estate agent … To order your copy at the discounted price of R120 click here. Transfer Duty this is a tax to the government on properties over R900 000. Buyers can make payments to the registering (bond) attorneys before the bond is registered. Bond registration costs (incl VAT) R 0: Bond registration cost (incl VAT) R 0. Trevor Sturgess, MD of Seeff Kibler Park, always encourages his clients to look carefully at the other costs involved with selling. A bond initiation fee of around R6000 plus VAT that is payable to the bank granting the bond. For many of you out there interested in buying a property it can come as quite a shock when you discover just how much all the associated fees can cost you in addition to any deposits and costs you incur with renovations and furnishing your new home. Get the best of Private Property's latest news and advice delivered straight to your inbox each week. And these often don’t become clear until the transaction is well underway. This Sellers Guide will take you through the processes encountered when selling a house, and provide you with useful tips from understanding the property market and house fix-ups, to choosing the right Estate Agent and … But, the hidden costs of buying a house in South Africa can take many potential homeowners by surprise, and often thwart the entire purchase. Find property in South Africa with Rightmove.co.uk - the UK's number one property website. They will pre-qualify the … We are pleased to offer a range of property in South Africa. This is obtained from the local authority or body corporate stating that your rates and taxes or levies are paid up to date. After your deposit, the transfer duty is one of the biggest upfront and once-off costs to consider when buying a property. Cost is to be quoted for. Copyright © Private Property South Africa (Pty) Ltd. 1997 - 2021. Rates and taxes have to be paid 4 – 5 months in advance before registration, of the property into the name of the new buyer, can take place. Copyright © Private Property South Africa (Pty) Ltd. 1997 - 2021. The fee is usually 5 – 8% of the property selling price, plus … Or, if your home loan is between R 600 000.01 and R 800 000.00, the required fee fee is R 700.00. The industry standard and statistics about what estate agent commission is. Article summary. Among the legal costs for selling a home in South Africa is the cost of bond cancellation, which is carried out by the bond attorney appointed by the bank. Absa has released its latest residential building statistics report – detailing how much it costs to build a home in South Africa right now. Duty is levied at 5 per cent on the value between R5000,000 and R1,000,000 (€103,680), and at 8 per cent on any value over R1,000,000. ABSA releases a monthly house price index for South Africa, based on the total purchase price of houses of 80m2 to 400 m2 size, costing R3.5 million or less, whose loans were approved by ABSA. Selling your house is a big step, and your main goal would be to sell your property in the shortest possible time with maximum financial return. the first R 40 000.00 of capital gain/loss per year (2017/18 tax year) is exempt from CGT. Steve van Wyk, Seeff’s MD in Centurion, says while agent’s commission is often set at around 7% of the value of the property plus VAT, sellers and agents can always choose to negotiate a set fee instead. The money is then paid to the Deeds Office. Motivation for a greater savings culture in SA by Finance Minister Pravin Gordhan was heard at the 10th anniversary celebrations of the SA Savings Institute. Selling prices are now on average 9.9% below asking prices – compared to the historical average of 9.0% since 2010. Your agent will be able to advise how. Home Property Selling Costs in South Africa. Based on FNB’s data, ‘downscaling due to financial pressure‘ was only the the fourth biggest reason why South Africans sold their homes in the first quarter of 2018 (12.1%). Discliamer: Every effort is made to ensure the correct figures are stated on the date of update of this article. Relocation costs and administration: Moving trucks, breakages, the administration of informing people of your change of address and taking days off work to coordinate the move should also be considered. VAT) and the transfer cost estimate would be R23 980 (incl. During South Africa’s worst previous recessions after World War II, residential property prices fell by up to 10%. As a result, your browsing experience on our site may not be optimal. As counter-intuitive as it might be, selling a property can be quite an expensive exercise. What costs are sellers responsible for during a property sale? Back to Property Advice Advice Centre Property Advice 5 unexpected costs when selling your home. You may also be required by the buyer's bank to provide a Beetle/ Infestation Clearance Certificate. The hidden costs you should know about when buying or renting a home in South Africa. Home > Advice > Selling > What costs are sellers responsible for during a property sale? South Africa’s top homes currently on sale. If you use the services of an estate agent, this cost is usually covered by the estate agent. The costs of selling a house quickly add up, therefore it is vital to know the costs involved in selling your property to determine the exact profit that you will make. Banks often add this figure to the bond amount. If you received a certificate when the electric fence was installed this will suffice. If a seller decides to go this route, it will cost them around R3 500 depending on the service provider they use. Get the best of Private Property's latest news and advice delivered straight to your inbox each week. Subscribe. These are probably the biggest cost associated with buying a property. If you are buying as an individual (officially termed a ‘natural person’), duty is calculated on the following scale: If you buy a home in South Africa, you must pay transfer duty on the value of the property above R500,000 (€51,840). A survey among estate agents shows that virtually all properties in this category were sold for less than … Sellers can save costs by letting the bank know that the property is for sale as soon as the property is listed. Percent drop in asking price. Post, petties, FICA other fees (incl VAT) *** R 0. Since most property in South Africa is sold through Estate Agencies, we take a look at the professional services they offer: They will be available to show your property to prospective buyers removing the necessity for you to be present. While some of these expenses can be offset against the final sale price, others will need to be settled before the sale can go … This, and any electrical repairs that need to be made, is for your account. the maximum marginal capital gains tax rate is 18%. A municipal deposit payable to the municipality when opening the account. This means that corporate homeowners (CCs or companies or trusts) are faced with a high CGT bill when disposing of the underlying property in which the members/directors/trustees resided, at a flat rate of 22.4% for companies/cc’s and 36% for trusts. Not only do they negotiate for the seller and connect the seller with strategic partners like conveyancing attorneys, but they also research recent sales in the area in order to determine a realistic listing price, advise on repair work that should be undertaken prior to listing, create a marketing plan that works for the seller and screen suitable purchasers before introducing them to the property amongst others. But for houses of more than R3.6 million, sellers can expect a larger discount of around 14%. 24 Jul 2018. Transfer duty. While agent’s commission is often one of the first cost considerations that sellers think of when it comes to selling their home, there are other costs that sellers and buyers need to keep in mind as well. He says besides agent’s commission (usually set between 6% and 8% plus VAT of the selling price) sellers will also need to pay the following: Bond cancellation: This is the cancellation fee payable to the bond attorneys representing the bank that is used. Costs involved in selling property in South Africa, Here’s how to get the most out of your estate agent. The cost of selling a home. The costs involved in selling a house can add up quickly, and selling a house in South Africa costs a fair amount, which is why you need to be prepared for every process that will come your way. The time-series stretches back to 2006. Get the latest property advice in South Africa. Ryan Brothwell 29 February 2020. *Proposed rates as announced by the Minister of Finance in the 2018 Budget. the “primary residence” exemption is as follows: As a natural person/s, if you sell your home (which is personally occupied by you), for a gain/loss of R 2 million or less, the sale is exempt from CGT. 2. Transfer duty ** … The attorneys will require a rates and taxes clearance certificate from the local council, the seller will need to put money upfront to get the certificate. Moving can add to your stress levels significantly. All Rights Reserved. How agent’s commission is determined and what agents do to earn their commission. The bond cancellation cost varies from institution to institution, but you can expect to pay upwards of R3 000 per bond, which is payable upon … But before you start spending you need be aware of the costs involved in selling your property in South Africa and how much … Bond costs. 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