As the cost of selling property in South Africa can be significant, every owner should consider and estimate the charges that are associated with a sale before the final decision to sell the property is taken. Taking these charges into consideration, could be the difference between a successful sale and a financially detrimental one. Keep them in mind, know what they are and ask should you not understand! As a guide, the following are the major ancillary costs of selling property:
Estate agent’s commission– The agents charge a fee which is usually between 5 – 8% of the property selling price, plus VAT.
Bond cancellation costs– These costs are charged by the attorneys nominated by the bank when you cancel your bond after selling your property.
Early bond cancellation (penalty) fees– If you intend to sell your property and cancel the bond, then you should let your bank know in advance and in writing. Failing which, the bank may decide to charge you a fee for cancelling your bond early.
Upfront contribution towards municipal rates and taxes, services and levies– These charges must be paid upfront for clearance certificates to be issued by the relevant authorities.
Compliance certificates– These certificates are needed for a transfer to take place which are usually not expensive, but if problems are discovered by the relevant professional you will also have to pay for the repairs before the certificate can be finally issued.
Capital gains tax– This tax could apply if you sell your property at a profit. Just keep in mind the R2 000 000 limit on “primary residence” sales.
These costs could be substantial and sink every seller’s dream of making the most out of their property investment. A Conveyancing Department should be at your beck and call to answer to these charges, fees and ancillary costs and give you the correct advice. Therefore, ask your Conveyancers before making the call and mitigate your risk.