TRANSFER AND BOND COSTS: HOW THESE ARE CALCULATED AND DETERMINED

by Taryn Davies Stevens • 2 MIN • 372 Words

It is very important to know exactly what transfer and bond fees will be charged by Conveyancers in each particular sale. Buyers can become very annoyed when they find the Conveyancer's account is much more than what were originally estimated. They either blame the Conveyancer for overcharging, or the Estate Agent for underestimating them, or both! Conveyancers are often to blame for not advising agents of all the costs likely to be involved in any transfer.

A brief explanation of each common item should assist:

Transfer Duty: This is a form of Government tax imposed on most property transfers. It has to be paid before the transfer documents are lodged as a transfer duty receipt has to be lodged.
Transfer Fee: This is the Conveyancer's fee for attending to the transfer. He usually follows a recommended tariff provided by his Law Society but is not bound by it.
Sundries: Disbursements, such as the cost of telephone calls, deeds office searches, other necessary documentation and the like are covered by this fee.
Value-Added Tax: It is a surcharge on all the Conveyancer's fees (it is not levied on his disbursements).
Deeds Office Registration Fee: This is an addition to the array of special taxes one pays on transfers these days. It represents the cost to the Deeds Office of effecting registration of the transfer though one cannot help feeling the transfer duty more than adequately covers this. The fee is relatively low, however.
Provision for Rates: A Conveyancer has to lodge a Clearance Certificate confirming that all rates have been paid up to registration. He will, on receipt of the clearance figures supplied by the municipality, request payment from the Seller of the amount due.

A point to note: Where the municipal value or an appraiser's valuation exceeds the purchase price of the property, transfer duty may be charged on the higher valuation. The Conveyancer is also entitled to increase his fees to match the valuation.

Where a property is sold obviously below its real value, it is wise to find out the municipal valuation before quoting transfer fees to the Buyer. There can be a substantial difference, especially in the Transfer duty payable.

CREDIT:

Property Law Publications

John Gilchrist

082 904 1300

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