Are you buying or building a house for the first time, and you have no idea what some of the legal terms involved mean? Many of us wish that we’d learned these things in school, along with how to handle taxes. But we didn’t, so JNK Properties is here to help you make sense of conveyancing.
What exactly is conveyancing?
According to the Collins Dictionary, conveyancing ‘is the process of transferring the legal ownership of property.’
So, simply put, conveyancing is the legal aspect of actually transferring ownership of your new property onto your name.
As simple as that sounds, it can become a lot more complicated in reality. One of the most concerning and confusing factors in this, especially for buyers, is all the fees involved.
What fees are you paying in the conveyancing process?
Conveyancing as a process actually deals with four main fees which you need to pay:
This is the fee you will pay to the transferring/conveyancing attorneys. Their work involves acquiring and handling the processing of the necessary documentation for the legal transfer of the property into your name.
Conveyancing fees are calculated according to the price of the property, but they may be negotiated. VAT is applicable to this charge (at 15%, since 1 April 2018).
Transferring attorneys will encounter costs in the transferal process, and this is what the admin fees pay for. These costs include those for dealing with Deeds Office searches, FICA, and other administrative duties and the related expenses.
This fee is set as a minimum, non-negotiable charge. VAT is applicable to this as well.
Deeds Office fees:
While the admin fee covers the transferring attorneys’ costs at the Deeds Office, this fee is paid over to the Deeds Office on by the attorneys on your behalf.
This fee pays for the Deeds Office’s work in updating their records, and it is calculated on a set scale depending on the purchase price. It is not negotiable, and VAT is not applicable.
Your transfer attorney pays this fee over to SARS for you, for the tax that is payable on the transfer of the property.
This fee is calculated differently depending on whether you are purchasing as a VAT registered entity or not. So, if you are buying it as a business that is VAT registered and the purchase price is below 750 000 rand, you won’t pay transfer costs. If the price is higher, you will pay a transfer fee, but for VAT registered entities the VAT will be payable based on the purchase price.
If you are not registered, you will need to pay a transfer fee. The VAT on this will be 15% of the purchase price.
Want to make things even simpler?
Contact JNK Properties with any further questions you might have.
Also, as a developer JNK Properties handles all of the legal fees for you if you have us build your new home. And since it’s a new home, you won’t have to worry about transfer fees either.