What are Conveyancing Fees?
When you’re involved in a property transaction—whether buying or selling—there are a range of legal processes to consider. One of the most crucial aspects of property transactions in South Africa is conveyancing, the legal process of transferring property ownership from one party to another. While conveyancing ensures that property transactions are legal and valid, it also comes with costs that need to be understood before you proceed.
Conveyancing fees in South Africa refer to the charges applied by the conveyancer for managing the legal aspects of a property transaction. These fees can vary depending on the property value, the complexity of the transaction, and the service provider you choose.
In South Africa, the cost of conveyancing is typically divided into two main categories:
- Professional Fees: The fee paid to the conveyancer for handling the legal aspects of the transaction.
- Disbursements: Additional costs incurred in the process, including third-party services such as municipal clearance certificates, Deeds Office fees, and transfer duty.
How are Conveyancing Fees Calculated?
In South Africa, conveyancing fees are usually calculated based on the purchase price of the property. Conveyancing fee structures are not fixed, but they generally follow a sliding scale that is regulated by the Law Society of South Africa. The fees are tiered according to the value of the property being transferred.
The basic conveyancing fees are typically around 0.5% to 1% of the property value. However, for properties with a higher value, the percentage often decreases. For example, for a property valued at R1,000,000, the professional fee might be calculated at 0.75% of the value, resulting in a fee of around R7,500. The higher the property price, the lower the percentage fee becomes, but the total fee may still be substantial due to the large value of the property.
It’s important to note that these fees may also vary slightly depending on the conveyancer or law firm you choose. Some firms may charge additional administrative or service fees, so it’s essential to clarify these upfront.
What is Included in Conveyancing Fees?
Conveyancing fees generally cover a range of services related to the property transaction. Here’s a breakdown of what is typically included in the fees:
1. Legal Advice and Drafting of Documents
A significant portion of the conveyancer’s fees will go toward providing legal advice and drafting the sale agreement. This involves ensuring that the contract is legally binding, protects your interests, and complies with relevant property laws. The conveyancer will also prepare the transfer documents required for the Deeds Office, which officially records the change of ownership.
2. Conducting Property Searches
Before transferring ownership, the conveyancer will conduct several searches to ensure that the property is free from legal issues such as unpaid municipal rates, outstanding bonds, or disputes. These searches are an essential part of ensuring that there are no hidden problems with the property that could delay or invalidate the transaction.
3. Payment of Transfer Duty
The conveyancer will also ensure that transfer duty (a tax levied by the South African government on property transactions) is paid to SARS (South African Revenue Service). Transfer duty is typically calculated as a percentage of the property value and must be paid before the property can be registered in the buyer’s name.
4. Registration of the Transfer at the Deeds Office
Once all conditions have been met, the conveyancer will register the property transfer at the Deeds Office, which is where property ownership is officially recorded. The conveyancer will prepare and submit the necessary documents, ensuring the change of ownership is legally acknowledged.
5. Administration and Miscellaneous Costs
There are often minor administrative tasks involved in the conveyancing process, such as postage, courier fees, and the creation of documents. These administrative costs may be included in the conveyancing fees or charged separately as disbursements.
What are the Additional Costs (Disbursements)?
In addition to the professional conveyancing fees, there are other costs that buyers and sellers need to consider. These are called disbursements and are usually third-party charges or government fees. Some common disbursements in the conveyancing process include:
- Transfer Duty: This is a tax levied by the South African Revenue Service (SARS) on property transfers. The amount depends on the value of the property and is usually the largest additional cost involved in conveyancing. For example:
- Properties valued at R1,000,000 and below are exempt from transfer duty.
- Properties valued between R1,000,000 and R1,375,000 are charged 3% of the property value.
- Properties above R1,375,000 attract higher rates.
- Municipal Clearance Certificates: Before the transfer can be completed, the seller must provide proof that all municipal rates and taxes on the property have been paid. The cost of this certificate is typically around R1,500 to R3,000, depending on the municipality.
- Deeds Office Fees: The Deeds Office charges a fee to register the property transfer, which can range from R500 to R2,000, depending on the complexity of the transaction.
- Title Deed Fees: There are also fees associated with the creation of a new title deed for the property, which may range from R500 to R1,500.
- Postage and Courier Fees: For the delivery of documents and related correspondence, the conveyancer may charge postage or courier fees, which are usually a few hundred rands.
Typical Conveyancing Fees: What Can You Expect to Pay?
Let’s look at an example of what you can expect to pay in total for conveyancing services based on different property values:
- For a Property Valued at R1,000,000:
- Professional Fees: R7,500 – R10,000
- Transfer Duty: R30,000
- Disbursements (Municipal, Deeds Office, etc.): R5,000 – R8,000
- Total Cost: R42,500 – R48,000
- For a Property Valued at R5,000,000:
- Professional Fees: R25,000 – R30,000
- Transfer Duty: R200,000
- Disbursements (Municipal, Deeds Office, etc.): R10,000 – R12,000
- Total Cost: R235,000 – R242,000
As you can see, the cost of conveyancing can increase significantly with the value of the property. It’s essential to budget for these costs when engaging in a property transaction.
How to Minimise Conveyancing Fees
While conveyancing fees are largely based on the property’s value, there are a few ways to minimize the overall costs:
- Shop Around for a Competitive Conveyancer: Different conveyancing firms may offer different fee structures, so it’s worth getting quotes from a few firms to compare prices. Make sure to ask for a detailed breakdown of costs so that you can compare services effectively.
- Negotiate Fees: Some firms may be open to negotiating fees or offering a discount, particularly for larger transactions. Don’t hesitate to ask.
- Avoid Delays: Ensure that all documentation is provided promptly and that all outstanding municipal fees are settled quickly. Delays can lead to additional costs, such as extra disbursements or administrative fees.
By working with an experienced conveyancer, you can ensure that your property transaction is legal, efficient, and cost-effective. At Burger Huyser Attorneys, we specialise in conveyancing services and are here to guide you through the process with clear, upfront fees. Contact us today for expert assistance with your property transactions.
Contact Burger Huyser Attorneys, and book a consultation.
To speak to one of our experienced attorneys in South Africa for immediate assistance, contact us on the numbers below:
Randburg call 061 516 6878; Roodepoort call 061 516 0091; Sandton call 064 555 3358; Pretoria call 064 548 4838;
Centurion call 061 516 7117; Alberton call 061 515 4699; Bedfordview call 061 536 3223
DISCLAIMER: Information provided in this article does not, and is not intended to constitute legal advice. READ MORE
