So you decided to sell your property and you are dreaming of what you are going to buy with the profit you will be making. But before you start spending you need be aware of the costs involved in selling your property in South Africa and how much it will eat into your profit.
Commission by Estate Agents
The commission taken by the estate agent is usually a standard figure of 7.5% ( excluding VAT ), which is the current recommended percentage set by the Estate Agency Affairs Board. This is not a set figure and you can negotiate this figure before signing a contract with an agency.
If you want to avoid the commission on the sale of the property you can always decide to sell your property privately.
Bond Cancellation Fees
A fee for canceling your current bond will be deducted from the amount the banks pays out when your property is sold.
If your home was purchased in a legal entity other than your private name, you will have to pay Capital Gains Tax (CGT). Even if the property is purchased in your private name you will still have to pay tax if the profit on the sale of the property is more than one million rand.
Local Council Costs
The conveyancer will hold back an amount on behalf of the local council to cover rates, taxes, water and lights. In some instances the council may reserve an amount to cover up to 6 months of services. Although this money does get repaid it is an amount that will be missing from that lump sum payment you’re expecting on the sale of your property.
When selling your property you also need to keep the cost of moving to a new property in mind. You may have to buy new blinds or curtains, clean the carpets, obtain new furniture and the new house may need to be repainted.