Transfer costs and taxes when buying property

The conveyancer's account arrives and the numbers are higher than you expected. Your purchase price was R1.8 million. Your bond was approved. Your deposit is ready. Nobody mentioned the extra R90 000 or more in fees and taxes standing between you and the keys. The amounts don't appear on the listing, and they don't show up in the bond approval letter. They arrive later, in a document most buyers haven't prepared for.

What are transfer costs?

Transfer costs are the fees and taxes a buyer pays to move legal ownership of a property from the seller's name to their own. They are separate from the purchase price, separate from the deposit, and separate from the bond registration fees. They can't be folded into the home loan in most cases. The three main components are transfer duty, paid to SARS; conveyancer's fees, paid to the attorney handling the transfer; and Deeds Office charges, paid when the title deed is lodged for registration. Each component has a different basis, a different payee, and a different timeline. Together, they form a cost you must settle before registration proceeds.

Key takeaways

• Transfer costs are your responsibility as the buyer and must be paid before the property can be registered in your name.
• Transfer duty is a government tax calculated on a sliding scale based on the purchase price. The current transfer duty brackets are published by SARS.
• Properties purchased from a VAT-registered developer may attract VAT instead of transfer duty, but not both.
• Conveyancer's fees are set by a tariff and are not freely negotiable, though different firms may charge within a range.
• No buyer pays transfer duty on a property priced at or below R1 210 000; the threshold applies to every purchase, not only a first home.
• Budget for transfer costs as part of your total purchase cost before you make an offer, not after the bond is approved.

Transfer duty: what the government takes

Transfer duty is a tax administered by SARS on the purchase of property not subject to VAT. A buyer purchasing a R1.8 million property owes R21 786 in transfer duty alone. The figure isn't a fixed rate. It is calculated on a sliding scale, and the bracket you fall into depends entirely on the purchase price.

Properties valued at or below R1 210 000 attract no transfer duty at all. From R1 210 001 to R1 663 800, the rate is 3% on the value above R1 210 000. Above R1 663 800 the duty is R13 614 plus 6% of the value up to R2 329 300, and the rates step up in further brackets from there. A buyer at R2 million sits in the middle bracket and owes R33 786 before the first set of house keys changes hands.

The conveyancer prepays this amount on your behalf and must provide a SARS receipt before the Deeds Office will proceed with registration. The payment is non-negotiable and non-refundable. It moves at SARS's pace, not yours.

VAT instead of transfer duty

A buyer purchasing directly from a developer registered for VAT pays VAT on the transaction rather than transfer duty. The two taxes don't stack. If VAT applies, transfer duty falls away entirely, and vice versa. The distinction is worth noting because VAT is typically built into the advertised purchase price, while transfer duty is always additional.

The practical catch is that buyers sometimes assume the developer's price is the total cost and are caught short when the conveyancer's invoice arrives with fees they hadn't accounted for. VAT covers the duty component, but conveyancer's fees and Deeds Office charges still apply. A buyer purchasing a new development at R2.5 million may owe no transfer duty, but the remaining transfer costs can still reach R40 000 or more.

Confirm in writing before you sign: whether the seller is VAT-registered, whether VAT is included in the purchase price, and whether any amount is still payable to SARS.

Conveyancer's fees: what the attorney charges

The conveyancer is the attorney who handles the legal side of the transfer. They are appointed by the seller, but their fees are paid by the buyer. That arrangement surprises many first-time buyers. The rationale is that the transfer benefits the buyer, since it moves the title into their name, so the cost follows the benefit.

Conveyancer's fees aren't plucked from the air. They are calculated according to a tariff guideline set by the Legal Practice Council. A transfer at R1.5 million typically attracts fees in the range of R25 000 to R35 000 before VAT, depending on the firm and the complexity of the transaction. The tariff scales with the purchase price, so a more expensive property costs more to transfer, even if the legal work involved is broadly similar.

You also pay the conveyancer's disbursements. These are the out-of-pocket costs the attorney incurs on your behalf: the costs of obtaining rates clearance figures from the municipality, the fees for obtaining a copy of the title deed, postage and petty expenses. They are not large individually, but they add up across a transaction. Disbursements of R2 000 to R5 000 are common on a standard residential transfer.

Bond registration fees: a parallel cost

Bond registration fees are separate from transfer costs but run alongside them and are paid at the same time. If you take out a home loan, the bank requires the bond to be registered over the property as security. That registration is handled by a bond attorney, usually appointed by the bank rather than you.

The bond registration fee is also calculated on a tariff scale, based on the bond amount rather than the purchase price. On a R1.5 million bond, the fee typically falls between R20 000 and R28 000 before VAT. The bank's attorney will raise a separate invoice, and you are responsible for settling it before registration can proceed.

Bond initiation fees, charged by the bank for setting up the loan, add a further R6 000 to R7 000 in most cases. These are distinct from the attorney's registration fee and are paid directly to the bank. A buyer with a R1.5 million bond, transfer costs on a R1.8 million purchase, and standard initiation fees could face a combined cash requirement approaching R100 000 on top of the deposit. That number is the reason budgeting for transfer costs before the offer is made isn't optional: it is the floor of the conversation.

Deeds Office charges and municipal clearance

The Deeds Office charges a fee to examine and register the title deed. The fee is modest compared to the other components, typically under R2 000 for a standard residential transfer, but it is compulsory and must be paid before the transaction registers.

More substantial is the rates clearance certificate, a document the municipality issues confirming the seller's account is up to date with no outstanding amounts. The conveyancer requests this certificate as part of the transfer process. Some municipalities require payment of rates and utilities up to four months in advance before they issue the certificate. That advance payment is refunded to the seller at a later stage, but the upfront amount can reach R30 000 or more depending on the municipality and the property.

The rates clearance certificate is the seller's responsibility, not yours. Delays in obtaining it slow the whole transfer, though. Municipalities in Ekurhuleni, Johannesburg, and eThekwini process these at different speeds. The safer assumption across all of them is four to six weeks from application to certificate. Planning for less than that frequently produces frustration and extended timelines.

The full picture: what you should budget

The numbers below are approximations based on a residential purchase at R1.8 million with a bond of R1.5 million. They are not guaranteed figures; they are realistic illustrations of the range.

Transfer duty at R1.8 million: approximately R21 800. Conveyancer's transfer fees: approximately R30 000 before VAT. Deeds Office charges: approximately R1 500. Bond registration fees: approximately R24 000 before VAT. Bond initiation fee: approximately R6 500. Combined: approximately R84 000 before VAT, depending on the firm.

That combined figure is around 4.7% of the purchase price. On a R3 million property, the percentage drops slightly but the rand amount climbs. Transfer costs as a proportion of the total transaction tend to be felt most sharply by first-time buyers and buyers stretching to the upper end of their affordability range.

The detail catching most people off guard is VAT on the professional fees. Conveyancer's fees and bond attorney fees are subject to 15% VAT. The tariff table gives pre-VAT figures. The final invoice is higher. A buyer who hasn't factored in VAT will find themselves short on the day the attorney calls for payment. No registration proceeds until that account is settled.

Closing Reflection

You sat down with a purchase price in mind and a bond approval in hand, and now you have the fuller picture. The costs don't arrive with a warning. They arrive with a deadline, on an account paid before any key changes hands. The amounts aren't arbitrary: they follow tariffs, tax tables, and municipal schedules, and each one can be estimated before you make an offer. Knowing where every figure comes from means the conveyancer's account reads as confirmation, not as a surprise.

You shouldn't have to discover the full cost of your purchase from the conveyancer's account. With Golden Homes you won't.

Contact Golden Homes to get a full cost estimate from an agent in your area before you make an offer.

The figures raise the same questions for nearly every buyer. Here are the ones coming up most often.

Frequently asked questions

What do transfer costs include when buying a property?

Transfer costs bundle together four separate charges: transfer duty or VAT, the conveyancer's transfer fee, the conveyancer's disbursements, and Deeds Office charges. Transfer duty is the government's tax on the purchase, calculated on a sliding scale published by SARS, with no duty payable at or below the R1 210 000 threshold. The conveyancer's fee pays the attorney moving ownership into your name, and it follows a tariff guideline based on the purchase price. Disbursements are the out-of-pocket amounts the attorney pays on your behalf: rates clearance figures, deeds searches, postage, and document fees. The Deeds Office charges a set fee to examine and register your title deed. If you're buying with a home loan, bond registration costs run alongside these, paid to the bond attorney, plus the bank's once-off initiation fee. All of it falls due before registration, not after, which is why the conveyancer's account arrives weeks before you get the keys.

Who pays transfer costs, the buyer or the seller?

The buyer pays transfer costs. The seller chooses the conveyancer, which surprises many buyers, but the account lands with you. The split of responsibilities works like this. You pay transfer duty, the conveyancer's transfer fee and disbursements, Deeds Office charges, and all bond-related costs if you're financing the purchase. The seller pays the agent's commission, the bond cancellation attorney for settling their existing home loan, the rates and levy amounts needed for a clearance certificate, and the compliance certificates: electrical, and where applicable gas, electric fence, and others the sale agreement lists. Nothing stops the parties agreeing to a different split in the Offer to Purchase, and in a slow market a seller sometimes offers to carry a portion of the buyer's costs to close the deal. If the OTP is silent, though, the default applies and the buyer carries the transfer account. Confirm the arrangement in writing inside the OTP, not in a side conversation.

Can transfer costs be included in my home loan?

Some banks offer a costs-inclusive bond, usually up to 105% of the purchase price, aimed mainly at first-time buyers. Where it's granted, the extra percentage goes toward transfer costs and bond costs, which spares your cash upfront. Two cautions before you count on it. Approval depends on your affordability assessment and the bank's valuation of the property, and banks grant the full 105% far less readily than a standard 100% bond. And financing the costs means paying interest on them for the life of the loan; a R60 000 cost amount financed over twenty years costs a multiple of that by the final instalment. If a costs-inclusive bond isn't available to you, the alternatives are saving for the costs separately, negotiating with the seller in the OTP, or choosing a purchase price low enough to leave room in your budget. First-time buyers below the transfer duty threshold escape the largest single component, which softens the total considerably. Ask your bond originator to model both routes before you decide.

When are transfer costs paid during the property transfer?

Transfer costs are paid before registration, usually within a week or two of the conveyancer's request. Shortly after the Offer to Purchase becomes unconditional, the conveyancer opens the file and sends you a pro forma account listing transfer duty, fees, and disbursements. The attorney needs the money in trust before lodging at the Deeds Office, because SARS requires the transfer duty upfront and issues a receipt the Deeds Office demands as part of the lodgement bundle. Expect the request four to eight weeks before the expected registration date. Bond costs follow the same pattern through the bond attorney's office, so the two accounts often arrive in the same week. Paying promptly protects your timeline; a transfer can't lodge while the trust account waits for funds, and a delay on your side pushes registration out week by week. If cash flow is tight, tell the conveyancer early. Attorneys can sequence some payments, but only when they know in advance.