1. What are the costs incurred when selling my home?
Rates Clearance certificate needs to be obtained. The Seller is responsible for ensuring the Municipal Account is up to date and is required to pay the rates for up to 5 months in advance before applying for the Rates Clearance Certificate. Once the property is registered the excess is refunded to the Seller.
A valid Electrical Compliance Certificate must be obtained from an electrician who is registered with the Electrical Contractors Board. This certificate is valid for 2 years and any modifications to the electrical installation during this period require a separate certificate or a new certificate needs to be issued.
Electric Fencing: A registered installer of electric fencing must be asked to inspect and test the electric fencing, make any necessary repairs, and issue a Fit for Purpose certificate.
The Seller is responsible for paying the Estate Agents commission.
When selling a sectional title unit the Seller requires a Levy Clearance Certificate which is obtained from either the Body Corporate or the Managing Agents. This certificate must be valid for a period extending beyond the date of transfer and must certify that all levies in respect of the sectional title are paid in full.
An authorised person registered with LPGAS has to issue a certificate to certify that all gas appliances on the property meet with the required regulations.
2. What costs are incurred when buying a property?
Transfer duty must be paid on the purchase of immovable property enabling the transfer of the property into the Purchaser’s name. Once paid to the receiver, a Transfer Duty receipt is issued and, only then, is the transfer lodged in the Deeds Office.
It is always advisable to get an older property checked by an engineer or builder if you plan to renovate the house.
3. What is FICA and why must I provide it?
Estate Agencies are an “accountable Institution” and are required by law to verify their customers. The Seller or Landlord are compelled to provide the following:
Original ID book or Passport or a verified copy of this
Proof of residential address (not older than 3 months)
Marriage certificate, if applicable
Income tax number
4. What does the term “voetstoets” mean?
Voetstoets means that the property is sold “as is”. The purchaser purchases the property with all the latent and patent defects. This clause still applies to once-off transactions between Buyer and Seller.
5. What is the difference between a latent and patent defect?
Patent defects are defects that are visible to the naked eye e.g. damp or structural cracks, and don’t require expert inspection. The Purchaser is always liable for patent defects unless stipulated in the sale agreement.
Latent defects refer to defects that one would not normally discover with a normal inspections e.g. a leaking roof.
6. Does the Consumer Protection Act (CPA) apply to residential sales?
The CPA does not apply to “old” residential sales but does apply to property speculators or developers who can now no longer rely on the “voetstoets” clause. With a new property Sellers are liable for any material defects and hazards relating to the property, whether or not they are aware if these defects and hazards.
7. What is meant by Market Value?
Market sensitive pricing can be the key to maximum market exposure and, ultimately, a successful sale. A property value is based on:
Location, design, amenities and condition
Availability of comparable (competing ) properties
Economic conditions that affect property transactions
8. What are the drawbacks of over-pricing?
Pricing your home higher than the CMA (Comparable Listings) may help sell your neighbours home faster than yours!
Over-pricing may attract the wrong buyers
Fewer qualified buyers will respond to your advertisement
You may miss out on a buyer who is unwilling to negotiate
Your home may become stale by being on the market too long
The property may eventually sell below market value
9. What is Capital Gains Tax?
This is a tax levied on the profit you make from the sale of your assets.
10. Is anyone excluded from paying Capital Gains Tax (CGT)?
If a South African Citizen occupies and then sells his/her primary residence for R2 million or less, the sale is exempt from CGT.
11. VAT or Transfer Duty?
If the Seller is registered for VAT and the purchaser is not, VAT is payable on the transaction by the Purchaser in place of transfer duty.
If the Seller is not registered for VAT then transfer duty is paid on the transaction.
If the Purchaser is also registered for VAT, the Purchaser is entitled to claim back the VAT from the Receiver of Revenue.
If the purchaser is a VAT vendor and the Seller is not, the Purchaser is entitled to claim back the Transfer Duty by recovering the amount paid for the transfer from the Receiver of Revenue.