Unpacking property transfer costs

Costs of transfer (payable by the purchaser or new owner) on a R220 000 property include the costs of conveyancing of R8 440 (as per recommended guidelines published by the Law Society of South Africa) plus disbursements. 

For most of the TSC’s clients, our conveyancing partner, STBB, provides professional services on a pro bono basis. But most clients need to pay direct disbursements. On a regular transfer on a R220 000 property these disbursements typically include:

      • Rates clearance certificate: R630 (including VAT)
      • Deeds Office fees: R642 (not VAT payable)
      • Deeds search: R71.91 (including VAT)

Together these costs amount to R1 343.91 – an amount which the TSC passes on to clients. In many cases, clients struggle to come up with this amount. We are therefore trying to reduce these costs as much as possible.

Rates clearance certificates

According to the City of Cape Town’s Tariffs, fees and charges book, the City charges R99.80 for an electronic rates clearance certificate (including VAT). Thus the bulk of the cost for rates clearance certificates charged by conveyancers actually goes to service providers. They have negotiated access to municipal rates clearance systems and enable conveyancers to request and receive digital access to rates clearance certificates.

There is a low-cost property option for rates clearance certificates which may well result in vastly reduced rates clearance costs, but it is not clear that the process will work on secondary transfers. The TSC is in the process of testing the system. If it works, we hope other conveyancers will adopt the same solution and pass on savings to their clients.

Deeds Office fees

The other significant disbursement is the Deeds Office fee of R642. This fee is levied by the Deeds Office on all property transfers on a sliding scale based on the value of the property. In line with the Deeds Registries Act of 1937, the Department of Agriculture, Land Reform and Rural Development publishes a fee schedule each year in the Government Gazette increasing these fees on an annual basis.

In line with the latest publication (from 28 February 2023) the fee for properties valued at R100 000 or less is a very reasonable R45. For properties above R100 000 but at or below R200 000 the cost is R101. As soon as you go above R200 000 the fee increases significantly to R642.

There is no rationale provided for the steep cost increase at the R200 000 mark. 

When this matter was first highlighted to senior officials in the Deeds Office, they correctly pointed out that Deeds Office fees pale into insignificance in comparison with conveyancing fees. What the Deeds Office officials did not consider is that the vast majority of our clients qualify as pro bono clients and do not pay professional fees and that it is the combined disbursement cost that is really a stumbling block to transfer proceeding.

Small steps

Given the glacial pace of titling reform in South Africa, we are setting our sights low, focusing on small changes that can be implemented with minimal coordination or regulatory change. Top of our list are fees for rates clearance certificates and the Deeds Office fee. These fees add very little to the bottom line but make a huge difference to our clients. Perhaps with a bit of luck we can see some small change.

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