Considering Buying A Home?
Category Advice
Buying a home isn't simply the cost of the house itself, but there are also other financial factors that you need to take into account when budgeting for a new home.
After all, a property is an investment and you would want to get the most out of such an investment.
Here are a few costs to bear in mind:
1. Transfer duty
The transfer duty is not something that has been made up so that you pay more for your home!
It is defined and governed by the South African Revenue Service (SARS) as a tax levied on the value of any property acquired by any person by way of a transaction or in any other way.
2. Transfer costs
This is not to be confused with transfer duty. They are two totally different things.
Transfer costs are the fees that are paid to the attorney for the work they do during the transfer process. A conveyancing attorney will be required to make the transferal of the property official and to ensure that the property is in the name of the new owner.
The amount that the purchaser pays an attorney for transfer costs is set out in tariff guidelines and varies depending on the total value of the property that is being sold.
3. Bond registration costs
A large percentage of the population depends on loans in order to buy their dream homes.
The financial institution that provides the funds to purchase the property will require some form of security which is usually a bond registered over the property. The purchaser will be required to pay the bond registration costs and this includes a bank initiation fee.
The bond registration costs are payable depending on the size of the bond that has been taken out. These costs will be paid out to a conveyancing attorney who will then be responsible for tending to the necessary paperwork and ensuring that the bond registration gets to the deeds office.
4. The cost of homeownership
Aside from these costs that take place during the process of purchasing a house, there are also monthly costs involved when owning a property such as rates and taxes, maintenance etc.
Bottom line: understanding the full cost of purchasing a property will help assist you to budget effectively.
Author: LRE Media