Who Pays Transfer Costs in South Africa?

In a South African property transfer, the buyer pays the transfer duty (calculated against the property value at SARS rates, with the first R1,100,000 exempt), the conveyancing fees for the transferring attorney, the bond registration fees if a bond is being registered, and the deeds office lodgement fees, while the seller pays the agent’s commission, the bond cancellation attorney costs (where there is an existing bond), the rates and levy clearance certificates, and any capital gains tax due on the sale. The split is market convention rather than a statutory rule — every line item is technically negotiable in the offer to purchase, but the default position across most South African property transactions follows the buyer-pays-transfer-costs / seller-pays-commission pattern described below.

The Short Answer: Who Pays What

The default cost allocation in a South African property transfer runs along these lines:

• Buyer pays — transfer duty (calculated against the higher of purchase price or fair market value), conveyancing fees for the transferring attorney, bond registration fees if registering a new bond, deeds office fees for lodgement and registration, bank initiation and valuation fees, and their own moving costs.
• Seller pays — the estate agent’s commission (typically 5–7.5% plus VAT), the cost of cancelling any existing bond (bond cancellation attorney fees and deeds office cancellation fees), rates clearance, electrical/plumbing/beetle compliance certificates, and capital gains tax on the profit portion of the sale.

The split is a market convention, not a statutory rule. Every line item is in principle negotiable in the offer to purchase, but the buyer-pays-transfer / seller-pays-commission allocation is what most South African transactions actually follow. Where parties intend to deviate, the offer to purchase should record the variation in writing — silence is interpreted as market-default allocation.

Transfer Duty (Buyer’s Largest Cost)

Transfer duty is the single largest cost the buyer typically carries. It is calculated under the Transfer Duty Act, charged by the South African Revenue Service (SARS), and calculated against the higher of the purchase price or the fair market value of the property. The current rate bands are:

Dutiable amount (R)	Rate
Up to R1,100,000	0%
R1,100,001 to R1,512,500	3% of the amount above R1,100,000
R1,512,501 to R2,117,500	R12,375 plus 6% of the amount above R1,512,500
R2,117,501 to R2,722,500	R48,675 plus 8% of the amount above R2,117,500
R2,722,501 to R12,100,000	R97,725 plus 11% of the amount above R2,722,500
Above R12,100,000	R1,178,025 plus 13% of the amount above R12,100,000

Transfer duty is payable by the purchaser within six months of the date of acquisition, and a Transfer Duty Receipt from SARS must accompany the deed of transfer lodged at the Deeds Office. The rate table is updated periodically, so the figures above should be re-checked against SARS at the date of any actual transaction.

Although transfer duty is not deductible against income, it does form part of the cost of acquiring the asset for capital gains tax purposes on any later resale.

Conveyancing Fees (Buyer’s Second Largest Cost)

Conveyancing fees are charged by the transferring attorney for drafting the deed of transfer, conducting the title search, drawing the guarantees, lodging the transfer at the Deeds Office, and finalising registration. They are regulated under the Legal Practice Act 28 of 2014 and published as a tariff in the Government Gazette — the tariff cannot be undercut without justification.

The fee is calculated as a sliding percentage of the purchase price, with the rate dropping at higher price brackets, and VAT is added on top. The same conveyancing tariff applies to the bond registration attorney’s fees, which the buyer also pays if a new bond is being registered. The Legal Practice Council publishes the current conveyancing tariff on its website and updates it from time to time, so the exact figure should be confirmed at the date of any transaction.

Deeds Office Fees (Buyer)

Deeds office fees are the prescribed amounts paid to the deeds office for examining, lodging, and registering the deed of transfer and any new bond. They are set by the Department of Agriculture, Land Reform and Rural Development and published in the Government Gazette, and they change periodically with the Consumer Price Index.

The deeds office at which the matter is lodged is the one serving the region where the property physically sits. The relevant offices in Gauteng are the Johannesburg Deeds Office (covering Johannesburg and surrounds) and the Pretoria Deeds Office (covering the greater Tshwane area, including Centurion, the northern suburbs of Pretoria, and surrounding nodes). Other provincial deeds offices are located in Cape Town, Pietermaritzburg, Bloemfontein, King William’s Town, Kimberley, Vryburg, and Mthatha.

Bond Registration Fees and Bank Charges (Buyer)

If the buyer is registering a new bond, several layered costs fall on the buyer:

• Bond registration attorney fees — the attorney registering the new bond at the Deeds Office charges the same Legal Practice Council conveyancing tariff as the transferring attorney; the buyer pays for both.
• Bank initiation fee — set by the bank, typically around R6,000 plus VAT on a standard home loan, payable by the buyer.
• Bond valuation fee — the bank sends a valuator to confirm that the property’s value supports the loan; the buyer pays for this.
• Bank administration / processing fees — vary by bank; the buyer pays these.

Rates Clearance and Compliance Certificates (Seller)

The seller carries the cost of confirming the property is in good standing at the date of transfer. The relevant certificates are:

• Rates clearance certificate — applied for by the transferring attorney from the relevant municipality; confirms that all municipal rates, taxes, and utility charges have been paid up to the date of transfer; the seller pays for this.
• Electrical compliance certificate — confirms the property’s electrical installation complies with SANS 10142; the seller provides and pays for this.
• Plumbing compliance certificate — not universally required, but commonly requested by buyers’ bond attorneys; the seller pays.
• Beetle (wood-borer) certificate — required in coastal and certain inland areas; the seller pays if a bond is being registered.
• Gas compliance certificate — required where there is an installed gas appliance; the seller pays.
• Electrical fence compliance certificate — required for properties with electric fencing; the seller pays.
• Levy clearance certificate — in sectional title schemes, the body corporate issues a levy clearance confirming the seller is up to date on levies; the seller pays.

Bond Cancellation Costs (Seller, Where Applicable)

If the seller has an existing bond registered over the property, a bond cancellation attorney must be instructed to cancel the bond at the Deeds Office at the same time as the new transfer is being registered. The seller pays the bond cancellation attorney fees (a separate tariff from the conveyance tariff), plus Deeds Office cancellation fees. Failing to cancel the seller’s bond can hold up the transfer or expose the seller to ongoing interest charges.

Agent’s Commission (Seller)

The estate agent’s commission is the single largest cost item the seller typically pays. Commission is regulated by the Estate Agency Affairs Act and is typically 5% to 7.5% of the purchase price plus VAT, depending on the mandate and the area. It is usually paid out of the proceeds of sale on the date of registration, not as an upfront cost. The agent’s mandate (sole, joint, or open) determines the structure — sole mandates typically command a higher commission rate than open mandates.

Capital Gains Tax (Seller)

The seller is liable for capital gains tax (CGT) on the profit portion of the sale. The net capital gain is calculated as 40% of the gain for individuals (an effective CGT inclusion rate at the maximum marginal income tax rate), and the seller has six months from the date of sale to pay over the CGT to SARS, or longer where a portion of the proceeds is being reinvested in another primary residence. A primary residence exclusion of up to R2 million of capital gain applies where the property being sold is the seller’s primary residence. The transferring attorney typically withholds the CGT from the proceeds of sale pending the SARS payment, unless the seller provides a tax clearance or directive.

VAT (If the Seller Is a VAT Vendor)

If the seller is a VAT-registered vendor and the property is sold in the course of an enterprise, the transaction may be zero-rated or standard-rated, and the seller must account for VAT to SARS. This is a separate regime from the default transfer duty calculation and should be flagged at the offer-to-purchase stage. A standard private property sale between two non-vendor parties is not subject to VAT.

Where the Money Actually Flows on Registration Day

On the date of registration, the buyer’s bond amount is advanced by the bank to the transferring attorney. The attorney then uses the bond proceeds to settle the seller’s existing bond (if any), pay the agent’s commission, settle rates clearance, pay capital gains tax, and pay the seller the net balance. The buyer pays the transfer duty and the conveyancing fees either directly to SARS and the attorney, or more commonly, as part of the bond advance.

What is Negotiable in the Offer to Purchase

While the default buyer-pays-transfer / seller-pays-commission split is the market convention, every line item is in principle negotiable between buyer and seller. Common commercial variations include the seller offering a “voetstoots” concession (no compliance certificates), the buyer offering a shorter transfer period in exchange for a price reduction, or the parties splitting the transfer duty in a slow market. The offer to purchase should specify exactly which costs each party is bearing — silence is interpreted as the market-default allocation.

Common Buyer/Seller Cost Allocation — Quick Reference

Cost Item	Default Bearer	Why
Transfer duty (SARS)	Buyer	Statutory obligation on the purchaser
Conveyancing fees (transferring attorney)	Buyer	Default on the buyer per market convention
Bond registration attorney fees	Buyer	Default on the buyer per market convention
Deeds office lodgement/registration fees	Buyer	Default on the buyer per market convention
Bank initiation, valuation, admin fees	Buyer	Charged by the bank to the borrower
Rates clearance certificate	Seller	Seller’s obligation to be up to date at transfer
Electrical/plumbing/beetle/gas compliance certificates	Seller	Required for the property to be transferrable
Levy clearance certificate (sectional title)	Seller	Seller’s obligation to be up to date
Agent’s commission	Seller	Negotiated in the agent’s mandate
Bond cancellation attorney and deeds fees	Seller	Seller’s obligation to clear the existing bond
Capital gains tax	Seller	Statutory liability on the seller
Moving costs	Buyer	Buyer’s own logistics

Frequently Asked Questions

Who pays the transfer duty — the buyer or the seller?

Transfer duty is paid by the buyer. SARS calculates it against the higher of the purchase price or the fair market value of the property, at rates starting at 0% on the first R1,100,000 and climbing to 13% above R12,100,000. The buyer must obtain a Transfer Duty Receipt from SARS and the transferring attorney must lodge it with the deed of transfer at the Deeds Office.

Who pays the conveyancing fees?

The buyer pays the conveyancing fees for the transferring attorney by default. The fees are regulated under the Legal Practice Act 28 of 2014 and are calculated on a sliding scale based on the purchase price, with VAT added on top. The buyer also pays the bond registration attorney fees if a bond is being registered.

Who pays the estate agent’s commission?

The seller pays the estate agent’s commission, typically 5% to 7.5% of the purchase price plus VAT, depending on the mandate. The commission is paid out of the proceeds of sale on the date of registration and is the seller’s largest single cost in the transaction.

Who pays the existing bond cancellation costs?

The seller pays the bond cancellation attorney fees and the Deeds Office cancellation fees if there is an existing bond registered over the property. The seller’s bond cancellation attorney must cancel the seller’s bond at the same time as the new transfer is being registered, otherwise the seller’s bond remains as a registered real right over the property until cancelled.

Who pays the rates clearance certificate?

The seller pays for the rates clearance certificate, which the transferring attorney applies for from the relevant municipality to confirm that all municipal rates, taxes, and utility charges have been paid up to the date of transfer. The seller also pays for the electrical, plumbing, beetle, gas, and electric-fence compliance certificates, and the levy clearance certificate in sectional title schemes.

Who pays capital gains tax?

The seller pays capital gains tax on the profit portion of the sale. The net capital gain is calculated as 40% of the gain for individuals (effective CGT rate of 18% for gains within the maximum marginal rate), and the seller has six months from the date of sale to pay it over to SARS. A primary residence exclusion of up to R2 million of capital gain applies where the property being sold is the seller’s primary residence.

Can the buyer and seller agree to split the transfer costs?

Yes. The default buyer-pays-transfer / seller-pays-commission split is a market convention, not a statutory rule. Every line item is in principle negotiable between the parties in the offer to purchase. Common commercial variations include the seller offering a voetstoots concession in exchange for a price reduction, or the buyer agreeing to share a portion of the transfer duty in a slow market. The offer to purchase should specify exactly which costs each party is bearing.

Does VAT apply to transfer duty or to a private property sale?

Transfer duty is not VAT — it is a separate tax collected by SARS under the Transfer Duty Act. A standard private property sale between two non-vendor parties is also not subject to VAT. VAT only becomes relevant if the seller is a VAT-registered vendor and the property is sold in the course of an enterprise, in which case it is either zero-rated or standard-rated and the seller must account for VAT to SARS.

Can a buyer or seller waive transfer duty?

The transfer duty exemption brackets (0% on the first R1,100,000) apply automatically to all natural persons. Certain other exemptions may apply — for example, where a property is acquired in the course of a divorce settlement, by a person who is insolvent, or by a public benefit organisation — and these exemptions are confirmed through SARS before the transfer is lodged. There is no general waiver for ordinary first-time buyers above the exempt threshold.

How long does a property transfer take, and who pays for delays?

A clean transfer typically takes two to three months from the date of the offer being accepted to registration, with main risk factors being bond approval and the seller’s existing bond cancellation. The parties are free to agree in the offer to purchase who bears the occupational interest cost if the transfer is delayed beyond an agreed date — in practice occupational interest is usually payable by the buyer from the agreed transfer date, and by the seller (to the buyer) if the seller’s delay is the cause.

If you are buying or selling a property and want a clear breakdown of the costs in your specific transaction — including a current transfer duty calculation under the latest SARS rates and a quote on the conveyancing fees — Burger Huyser Attorneys’ Notarial & Conveyancing department can take you through the figures. The firm practises from its Linden head office (49 First Avenue, Randburg, 011 888 0246) and through its Gauteng branch network, including Centurion (012 644 4990), Bedfordview (011 201 7190), and Alberton (011 439 3990), and carries a qualified Notary and Conveyancer on staff. Reach out to the Linden office on 011 888 0246 to be put in touch with the conveyancing team.