Selling a property in South Africa involves more than just agreeing on a price; it comes with several associated costs that sellers must budget for to ensure a smooth transfer. At AMG Properties, we provide this factual overview to help Western Cape homeowners understand these expenses, based on current market practices. Costs can vary by location, property type, and individual circumstances, so consulting a professional is recommended.
Estate Agent Commission
Sellers typically pay an estate agent's commission, which is a percentage of the final selling price plus 15% VAT (in most cases). Rates generally range from 5% to 7.5%, though this is negotiable and should be agreed upon upfront in the mandate agreement.3 sourcesFor a R2 million property at 7%, this could amount to around R140,000 plus VAT.
Compliance Certificates
Sellers are required to obtain several compliance certificates before transfer, covering safety and habitability standards. These include:
- Electrical Compliance Certificate (ECC).
- Gas Compliance Certificate (if applicable).
- Electric Fence Certificate (if applicable).
- Water Installation Certificate (in certain municipalities).
- Beetle Infestation Clearance Certificate (common in coastal areas like the Western Cape).
- Solar Compliance Certificate (if solar systems are installed).
Each certificate costs approximately R500 to R3,000 for inspections, with additional fees for any required repairs to pass compliance. Costs may be higher in coastal regions due to the beetle certificate.
Rates and Levies
Municipal rates (including taxes for water, electricity, sewerage, and refuse) must be cleared up to the transfer date. Sellers often need to pay 2–6 months in advance to obtain a Rates Clearance Certificate, which is mandatory for registration. Amounts vary by municipality and property value—e.g., in Cape Town, monthly rates might range from R1,000 to R5,000. For sectional title properties, sellers pay pro-rata body corporate levies up to transfer and are responsible for the Levy Clearance Certificate fee, typically R500–R1,000. Special levies (for unexpected repairs) may also apply, prorated based on ownership period.
Bond Cancellation
If the property has an existing home loan, sellers must cancel the bond, incurring administrative fees from the bank. This costs R3,000–R6,000 or more, paid to the bank's attorney, plus Deeds Office fees. Banks require 90 days' notice to avoid penalties.
Other Upfront and Potential Costs
- Legal and Conveyancing Fees: Sellers' attorneys handle transfer documents, with fees varying by complexity (typically R5,000–R15,000).
- Capital Gains Tax (CGT): On profits above R2 million for primary residences (40% inclusion rate for individuals, taxed at marginal rate).
- Repairs, Staging, and Moving: Optional but common; repairs to pass compliance (variable), staging (R5,000+), and moving (R5,000–R20,000 depending on distance).
- Advertising/Marketing: If not included in agent fees, could add R1,000–R5,000.
These costs are generally deducted from sale proceeds at transfer, but upfront payments may be needed for certificates and rates.
Final Considerations
While these expenses can add 7–10% to the overall transaction, they ensure legal compliance and a successful sale. Sellers in the Western Cape may face slightly higher compliance costs due to regional requirements like beetle certificates. At AMG Properties, we assist sellers in budgeting accurately and navigating these steps to minimise surprises. For personalised advice, contact AMG Properties to discuss your sale.
References
- ooba.co.za: The hidden costs when selling a house in South Africa
- Grose Property Group: Hidden Costs of Selling Property in South Africa
- VDM Attorneys: How Estate Agent Commission is Negotiated and Paid in SA
- Municipal Debt: Hidden Costs of Selling Property in South Africa
- FW&B Law: Costs Involved in the Conveyancing Process
- Property24: Selling a property? Consider these costs
- JV Attorneys: Who Pays for the Levy Clearance Certificate in South Africa
