Chris Fick & Associates

If you are selling property in South Africa, check what costs you have to pay, and whether they are applicable to you:

  1. Bond cancellation costs

Cancellation Costs: This is charged when you cancel your bond after selling your property. This cost  total up to R3 000,00 or more per mortgage bond.

Early Settlement Penalty: If you are repaying a bond within 2 or 3 years (depending on the bank) of having purchased the property, your bank may be entitled to charge you an “early settlement” fee. You would need to ask your bank whether this penalty could apply to you and, if so, how it would be calculated.

Notice Period Penalty: Most banks require 90 days’ written notice that you will be repaying the bond. Penalty interest, the additional interest payable on the outstanding balance of your bond.

The Transfer Process: It takes about 2 to 3 months from the date that the offer to purchase is accepted by you, to the registration of the property into the buyer’s name. Note that if you need money from your bond to pay your rates and taxes or levies in advance or any other costs, then you should draw out this money before giving notice of cancellation.

  1. Agent’s commission and VAT

An estate agent charges commission on the sale of any property, and it is usually expressed as a percentage of the purchase price, however, it excludes VAT. The agency commission is likely to be the biggest cost by far, so it pays to consider your selling alternatives carefully.  Your options would be:

  1. Compliance certificates

Before a property is transferred into the new buyer’s name, various compliance certificates are required. These certificates cost at least R500 each, but if problems are discovered then you also have to pay for the necessary work to be done before the certificate can be issued.

Electrical: Another cost that most sellers should be aware of is the Electrical Certificate of Compliance or ECOC, which according to the current legislation is only valid for a period of two years. If the electrician does find faults, the cost will escalate depending on the work that needs to be done to get the home compliant.

Electrical Fence System Compliance Certificate: If a homeowner has opted to install electrical fencing as a security measure, an Electrical Fence System Compliance Certificate, which is different from an ECOC, is now also required where applicable.

Beetle (entomological): While not compulsory, homeowners who are selling their property in the Western Cape and KwaZulu-Natal regions will generally need to provide the purchaser with certification. This certificate indicates that the property is free from beetle infestations.

Gas: To confirm that the gas lines are safe, homeowners will be required to obtain a certificate of conformity, which indicates that the installation has been done by a qualified technician.

Plumbing: Currently a requirement for Cape Town, this certificate confirms that the plumbing on the property is sound. If the inspection results in work needing to be done to achieve compliance, then the contractor will give a quote for it.

  • This certificate does not confirm that the property is free from rising damp or that there are no blocked drains.
  1. Rates, taxes and levies clearance certificate

Rates and taxes: Attorneys will require a rates and taxes clearance certificate from the local council, and the seller will need to put money upfront to get this certificate. To provide the clearance certificate, the council can ask between 2 and 6 months of future-dated payments.

  • If the home happens to be registered within a shorter time frame, the council will pay back the additional money which the seller has paid.

Levies: In the instance where the seller is in an estate or sectional title property, the homeowners’ association or body corporate may request that the seller pays for their levies a few months in advance to ensure these costs are covered until transfer takes place.

  1. Property Capital Gains Tax

Capital Gains Tax (CGT), which is payable by the seller, refers to the tax applied by SARS to the capital gain on the property. In many cases, the sold property will qualify as a so-called “primary residence”, which means that there will be either no CGT or a reduced amount of CGT payable.

  1. Moving costs

This is an inevitable part of moving from the sold property, and it is often not considered until the last minute. What must be considered here is how the move from point A to B will be made and this can also vary depending on how many trips need to be made. The costs to consider are the petrol costs and the possible cost of professional movers.

  • Getting insurance for items being moved should be factored in.

As seller, always appoint your own conveyancer for the transfer:

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For more information or advice, contact us: T: (021) 424 3937 E:

Chris 082 491 0032 // Maryka 082 788 4499 // Tommie 083 229 9029

This article is a general information sheet and should not be used or relied on as legal or other professional advice. No liability can be accepted for any errors or omissions nor for any loss or damage arising from reliance upon any information herein. Always contact your adviser for specific and detailed advice. Errors and omissions excepted (E&OE).