Conveyancing Fees in South Africa 2022: What will you Pay?
Conveyancing is a fairly common deed that is practised in South Africa and throughout the world. It allows the transfer of non-movable property such as a house, apartment, or land from one person to another. There’s no rocket science involved when it comes to understanding how a conveyancing deed is done. However, what we are going to talk about today is conveyancing fees in South Africa.
Latest Update Regarding Conveyancing Fees in South Africa 2022
When it comes to regulating law-related practices in South Africa, the Law Society of South Africa is responsible. In May 2021, they released new guidelines regarding the conveyancing fees structure. These fees are calculated based on the following legislation.
- Conveyancing: Conventional Deeds (Act 47/1937): Guideline of Fees
- Conveyancing: Sectional Titles (Act 95/1986): Guideline of Fees
- Interprovincial Apportionment Guidelines: Sectional Titles
- Interprovincial Apportionment Guidelines: Conventional Deeds
- Conveyancing fees and Apportionment of fees: Alienation of Land Act
For a detailed overview, we encourage you to read the latest Conveyancing: Conventional Deeds (Act 47/1937) document by the Law Society of South Africa. These guidelines are in effect since 1st May 2021.
How are the Conveyancing Fees Calculated in South Africa?
A conveyancing fee consists mainly of transfer fees and transfer duties. Transfer fees are mandatory and you have to pay them to your attorney. Apart from that, if the purchase price of your property is R1,000,001 and above, you are also liable to pay transfer duties. Transfer duty is a SARS (South African Revenue Service) tax that has to be paid during a property transaction of any sort.
The Transfer Duty is calculated as followed:
- Property value up to R1,000,000 has no liable transfer duty.
- If your property purchase value is within R1,000,001 to R1,375,000, then it is 3% of the value above R1,000,000 price.
- Between R1,375,001 to R1,925,000, you are liable to pay R11,250 + 6% of the value above R1,375,000
- If it is between R1,925,001 to R2,475,000, it will be R44,250 + 8% of the value above R1,925,000
- Within the property value of R2,475,001 to R11,000,000, the tax is R88,250 + 11% of the value above R2,475,000
- If the value is higher than R11,000,001, then the liable tax is R1,026,000 + 13% of the value above R11,000,000
How is this calculated? Let’s take an example. Suppose your property costs you R11,375,000, then your duty tax will be calculated as follows.
For the R11,000,000, you will have to pay a fixed amount of R1,026,000. Now, the remaining property amount to be taxed is R375,000, right? Let’s calculate the 13% of R375,000 here, which leads us to R48,750.
More on the Transfer Duty can be found here.
How is the Transfer Fee calculated?
The transfer fee is fixed according to the conveyance fees guidelines and has to be paid to the attorney handling the conveyance process. According to the guidelines, this is how it works.
- If the property costs R100,000 or less, you have to pay a fixed amount of R5,400
- Within R100,001 to R500,00, you will be paying R5,400 + R860 per R50,000.
- Between R500,001 to R1,000,000, the cost will be R12,280 + R1,660 per R100,000 above that.
- If the property value is within R1,000,001 to R5,000,000, you are liable to pay R20,580 + R1,660 per R200,000 above that.
- If the property value exceeds R5,000,000 (R5,000,001 and above), the calculated fee will be R53,780 + R4,200 per R1,000,000.
Let’s understand this with an example too! Suppose your property value is R6,750,000, then your total transfer fee will be:
- The fixed price of R53,780 has to be paid for the first R5,000,000.
- After that, you will be liable to pay R4,200 per R1,000,000 after that. Here, you will pay R4,200 for the value between R5,000,001 to R6,000,000 and another R4,200 for R6,000,001 to R6,750,000.
Yes, even if the value is not a whole million here, you will have to pay a fee for that. To understand this better, even if your value was R6,000,001, you would still be paying R4,200 twice.
Are there any other added costs?
Apart from transfer fees and transfer duties, you will be liable to pay a 15% VAT on transfer fees + any general disbursements your attorney charges in South Africa. This completely differs from attorney to attorney. VAT does NOT apply to transfer duties.
Then there are Deeds Office fees. They have also been revised since April 1, 2021. You can get complete information regarding the Deeds Office fees here. Apart from that, your attorney may charge you with deeds Office search fees and Rates Clearance fees.
Make sure you talk to your attorney for a complete fee structure before proceeding with the transaction.
The conveyance fee structures have been updated since May 1, 2021. Make sure you understand them precisely before proceeding with the transaction. The person purchasing the property is liable to pay for the conveyance fees. It is important that you talk to your attorney in case of any doubts. Conveyance fees can ramp up to a pretty hefty sum.
A law firm specialising in conveyancing and property law can effectively help you with this. On DLG Legal, you can find thousands of law firm contacts. Also, we have segregated the contacts based on South African regions. So, feel free to select your region and converse with law firms today.