Conveyancer’s fees to increase
from 1 March 2013
Who gains the most –
Attorneys or the State?
With the imminent increase in transfer-and bond fees (transfer fees
will increase by about 10% and bond fees by between 20%-25%), the public is
bound to get upset about yet another increase.
This prompted me to calculate the percentages of fees and expenses the
transfer of properties in three price ranges with the aim of establishing who
stands to gain more from property deals: The State or Attorneys.
The calculation below presumes that a client registers a bond for the
same amount as the purchase price. In practise this seldom happens as financial
institutions are usually only prepared to grant 100% bonds up to R1 500 000,00.
Expenses paid to third parties such as local authorities, service providers to
attorneys and financial institutions (who charge an initiation fee of R5 700
(VAT incl) for every bond) were disregarded for purposes of the calculation.
|
Purchase price/ Amount of bond
|
Transfer duty (SARS)
|
VAT
SARS
|
Transfer
Deeds Office Levy
|
Transfer fee
(T Att)
|
Postages & Petties
(T Att)
|
Bond Deeds Office Levy
|
VAT on bond fee & expenses
|
Bond Fee
(B Att)
|
Postages & Petties
(B Att)
|
Total all
|
% to State
|
% to Attorneys
|
|
800 000
|
6 000
|
1 694
|
750
|
11 550
|
550
|
750
|
1 380.40
|
9 360
|
500
|
32 534
|
32.50%
|
67.50%
|
|
1 500 000
|
37 000
|
2 387
|
850
|
16 500
|
550
|
850
|
2 018.80
|
13 920
|
500
|
74 576
|
57.80%
|
42.20%
|
|
3 500 000
|
197 000
|
5 327
|
950
|
37 500
|
550
|
950
|
3 497.20
|
24 480
|
500
|
270 754
|
76.72%
|
23.28&
|
The table above speaks volumes. It is thought that at present the
average property in South Africa sells for R850 000,00. At that price
Attorneys obviously gain the most. But from approximately R1 500 000,00,
the State earns close to 60% and more of the total fees and expenses bill. And remember,
as attorney’s fees increase, so does VAT.
The reason for this is that Transfer Duty was reduced a few years ago
to assist entry level purchasers of property. The formula to calculate Transfer
Duty is at present the following:
|
Value of property
|
Transfer duty
|
|
R0-R600 000
R600 001-R1 000
000
R1 000 001-R1 500 000
R1 500 001
and above
|
0%
3% of value
exceeding R600 000
R12 000 + 5% of
value exceeding R1 000 000
R37 000 + 8% of
value exceeding R1 500 000
|
