In a South African property transaction, costs are split between buyer and seller. Understanding who pays what helps you budget accurately and avoid surprises at the last moment.
The general rule is straightforward: the buyer pays the costs of getting the property into their name (transfer duty, attorney fees, bond registration), while the seller pays the costs of clearing the property for transfer (rates clearance, compliance certificates, bond cancellation). But the details matter, and there are areas where disputes can arise.
Costs the Buyer Pays
The buyer is responsible for the costs associated with transferring ownership and, if applicable, registering a mortgage bond. These are the costs you need to budget for above and beyond the purchase price.
Transfer Duty
A tax payable to SARS, calculated on a sliding scale based on the purchase price. Properties purchased for R1,210,000 or less are exempt. Above this threshold, duty ranges from 3% to 13% on the amount exceeding each bracket. This is a statutory cost — it cannot be negotiated or avoided.
Transfer Attorney Fees
The professional fee charged by the conveyancing attorney for the legal work involved in transferring the property. Our fixed fee is R20,000 — this covers all professional work for the transfer, regardless of the property value. Other firms charge according to the LSSA guideline tariff, which scales with the purchase price.
Bond Registration Fees
If you are financing the purchase with a home loan, the bank appoints its own attorney (the bond attorney) to register the mortgage bond. The bond attorney's fee is tariff-based and separate from the transfer attorney's fee. This cost is determined by the bond amount and is paid by the buyer as part of the bond registration process.
Bond Initiation Fee
A once-off administrative fee charged by the bank for processing your home loan application. This typically ranges from R6,000 to R7,000 and is usually added to the bond amount (meaning you pay it off over the term of the loan rather than upfront).
Deeds Office Fees
Statutory fees charged by the Deeds Office for registering the transfer deed and, if applicable, the mortgage bond. These are set by government regulation and are based on the property value and bond amount respectively.
Costs the Seller Pays
The seller is responsible for delivering the property in a condition that allows transfer to proceed. This includes clearing all municipal obligations and obtaining the required compliance certificates.
Rates Clearance
The municipality issues a rates clearance certificate confirming that all municipal rates and taxes are paid up to date. The seller must pay any outstanding rates, plus an advance payment (typically covering rates several months ahead), before the certificate is issued. Without this certificate, the transfer cannot be lodged at the Deeds Office.
Compliance Certificates
An electrical certificate of compliance (COC) is mandatory for every property transfer. The seller must engage a registered electrician to inspect the electrical installation and issue the certificate. Depending on the property, additional certificates may be required: beetle (wood-destroying organisms), gas compliance, and plumbing compliance. The cost of any repairs needed to obtain these certificates also falls on the seller.
Bond Cancellation Fees
If the seller has an existing mortgage bond on the property, the bank appoints a cancellation attorney to cancel the bond. This fee typically ranges from R5,000 to R8,000 plus VAT. The seller cannot avoid this cost — it is a prerequisite for the transfer to proceed.
Estate Agent Commission
If the property was sold through an estate agent, the seller pays commission — typically 5% to 7.5% plus VAT of the purchase price. This is deducted from the proceeds of the sale, usually paid from the proceeds held in the conveyancer's trust account on registration.
Capital Gains Tax
If the property is not the seller's primary residence, or if the gain exceeds the primary residence exclusion (R2 million), capital gains tax may be payable. This is calculated by SARS as part of the seller's annual tax return, not as part of the transfer process itself. The transfer attorney does not collect this — it is the seller's responsibility to declare it to SARS.
What the Offer to Purchase Says
The standard offer to purchase (OTP) usually contains clauses specifying the cost allocation. Most standard-form OTPs follow the convention outlined above: the buyer pays transfer and bond costs, the seller pays clearance and compliance costs.
However, parties can negotiate variations. In a buyer's market, the seller might agree to contribute toward transfer costs. In a competitive market, a buyer might offer to cover certain seller costs to make their offer more attractive.
Key Clauses to Look For
- Who appoints the conveyancer: The seller typically has the right to appoint the transfer attorney, which means the seller's attorney handles the transfer at the buyer's cost
- Who pays the electrical COC: Standard practice is that this is the seller's cost, but some OTPs allocate it differently
- Rates shortfalls: The OTP should specify what happens if a supplementary rates account is issued after transfer — does the seller remain liable, or does the buyer assume it?
- Occupation date and rent: If the buyer occupies before registration, the OTP should specify interim occupational rent and responsibility for utilities
Common Disputes
Even with clear contractual terms, practical issues can arise during the transfer process. Here are the disputes we see most often.
Electrical Certificate Disputes
The seller is obligated to provide the electrical COC, but the scope of required repairs can be contentious. An older property may need significant electrical work to meet current standards. The seller may argue that certain items are "fair wear and tear" rather than non-compliance. The key is what the regulations require — the electrician must certify the installation as safe, regardless of its age.
Levy Arrears and Special Levies
The seller must clear all outstanding levies before the body corporate will issue a clearance certificate. However, special levies raised after the date of the OTP can be contentious. If the body corporate approves a special levy between the date the OTP is signed and the date of registration, the question becomes: who pays? Well-drafted OTPs address this specifically, but many do not.
Rates Shortfalls
The municipality sometimes issues a supplementary rates account after transfer. This can happen when the property was revalued or when the municipality corrects a billing error. The question of who pays — the seller (who owned the property when the rates accrued) or the buyer (who is now the registered owner) — depends on the terms of the OTP and, ultimately, on who is the "owner" at the relevant time.
Occupational Rent
If the buyer occupies the property before registration (early occupation), the OTP should address interim occupational rent. Common practice is for the buyer to pay a monthly amount calculated as the interest on the purchase price or a fair rental value, whichever is agreed. If the OTP is silent on this, disputes can arise about the amount and period of occupation.
Sectional Title Considerations
Sectional title properties (apartments, townhouses in a complex) have additional costs that do not apply to freehold properties. These are driven by the body corporate structure and the requirements of the Sectional Titles Schemes Management Act.
Managing Agent Fees
The managing agent charges an administrative fee for providing the clearance figures and processing the transfer. This is typically paid by the seller as part of the clearance process. The fee varies between managing agents but is usually a few hundred rand.
Body Corporate Consent
Some sectional title schemes require body corporate consent for the transfer. This is typically governed by the scheme's management rules. Where consent is required, the trustees must approve the incoming owner, which can add a few days to the timeline.
Special Levies: Past vs Future
Special levies already raised and outstanding are the seller's responsibility. Special levies raised after registration are the buyer's responsibility. The grey area is special levies approved before the OTP but not yet invoiced — the OTP should address this clearly to avoid disputes.
Exclusive Use Area Cessions
If the unit comes with exclusive use rights (a parking bay, garden area, or storeroom that is not part of the section itself), a separate cession document must be prepared and registered. This is an additional legal document that the transfer attorney prepares, and it adds a nominal cost to the transfer.
Get a Quote
Whether you are buying or selling, knowing your costs upfront is essential for budgeting. Use our transfer cost calculator for an instant estimate, or contact us for a detailed quotation. Our R20,000 fixed attorney fee means the buyer's professional fee component is already settled — no surprises, no escalation.
Get a Fixed-Fee Quote
Know your transfer costs upfront. Our R20,000 fixed fee covers all professional work — no hidden charges, no sliding scale.