On the road to property ownership: Transfer duty, transfer costs & additional costs with off-plan d
Category Advice
Purchasing property for the first time is one of the most exciting times of your life! In the 21st century, the idea of purchasing in an off-plan development has become the way to go! However, there are many individuals that don't understand the benefits or implications of purchasing a home in this way including what transfer duty, transfer costs and other additional costs are, which we will discuss below.
What is a transfer duty?
According to SARS, a transfer duty is a tax levied on the value of any property acquired by any person by way of a transaction or in any other way. A transfer duty is not applicable to off-plan property developments as they are bought straight from the developer or if you are purchasing property under R900 000. This is a unique cost saving when purchasing.
What are transfer fees?
Transfer fees are the fees paid to the conveyancer who handles all administrative and legal procedures and the transfer of your property into your name. Once you take ownership of the property you will need to pay transfer fees. With off-plan developments, the benefit is that you often have no transfer fees payable and VAT is usually included in the purchase price at which you buy straight from the developer.
What are additional costs?
With off-plan property, additional costs range per development and these costs should be asked about during your appointment with your sales agent and conveyancer. Stabilisation costs and once-off fees can be applicable depending on the development. Other additional costs like the building levies should be considered and can be saved towards along with your bond repayment which you only start contributing towards once you take transfer of your unit. Apart from any additional costs within the development, be sure to raise questions with your bank regarding your bond.
While opting to purchase in an off-plan development can be risky, you can avoid disappointment and loss by purchasing from a reputable and trustworthy developer. By doing your due diligence and referencing, while keeping an open-mind and communicating with the parties at hand, you can save on major costs and secure a home in a prime location, with modern fixtures, a home with low maintenance and a secure, luxury lifestyle for your family.
Author: Devmco Realty
