When acquiring land the contract must be in writing and signed by both the Purchaser and the Seller to be a valid and legally binding contract.
Ensure that you deal with a reputable agent. If there is any clauses in the contract be sure to ask the agent or alternatively prior to signing the contract refer your question to an attorney / conveyancer.
The conveyancing process
- The first step in the conveyancing process is the abovementioned valid Agreement of Sale to be handed to the appointed Conveyancer. (Usually the Seller of the property nominates the Conveyancing Attorney)
- The Conveyancer will then draft the necessary documents which both the Seller and Purchaser will be required to sign.
- The Conveyancer will apply for the transfer duty receipt and municipal clearances.
Transfer Duty
The transfer duty is usually payable by the Purchaser. The transfer duty is payable to the Receiver of Revenue and based on the purchase price. If the Purchaser is an individual –
| R 0 – R 500 000.00 |
Exempt |
| R 500 000.00 – R 1 000 000.00 |
5% |
| Above R 1 000 000.00 |
8% |
In the instances where the Purchaser is a legal entity e.g trust, close corporations and companies – the transfer duty is fixed on 8% of the purchase price.
VAT
No transfer duty is payable if the Seller is registered as a VAT vendor on date of registration, in which event the Seller will make payment to the Receiver at the standard rate of 14%.
- The documents are now lodged together with the cancellation of any existing mortgage bonds and/or new mortgage bonds in the Deeds Office.
- Within 7 to 10 working days the transaction will come up for registration on which day all existing mortgage bonds over the property are cancelled simultaneously with the registration of any new mortgage bond in favour of the relevant bank. The purchaser then becomes the new owner of the property and the purchase price is paid to the Seller.
FEES
The Conveyancer’s fees are prescribed by a tariff and are calculated according to the purchase price. These fees plus VAT are normally the liability of the Purchaser. In some instances the Seller might make a cost contribution but the parties will be assisted herein by the agent.
The Seller of the property is liable for the following costs except if otherwise agreed upon:
- Estate Agents Commission
- Electrical and Beetle Certificates
- Cancellation fees it there is an existing bond over the property
In the event of all parties and third parties (Municipality, Receiver of Revenue, Bond Attorney, Bond Cancellation Attorney etc) running on schedule the duration of the transaction from date of bond approval can be between 6 to 8 weeks.
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Information supplied by SP Beeselaar Attorneys
PROKUREURS • AKTEBESORGERS • NOTARISSE
ATTORNEYS • CONVEYANCERS • NOTARIES
Tel: (021) 982 3678
e-mail: sbeeselaar@telkomsa.net
Fax: (021) 982 7882
Palmsingel 25
Brackenfell
7560
Posbus 887
Brackenfell
7561
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