Selling a property is often associated with the amount a buyer agrees to pay. For homeowners who are planning to purchase another property, settle debt or release funds for retirement, the final amount received after the sale is particularly important.
However, several expenses and legal requirements can affect the proceeds of a property transaction. Sellers who are unaware of these obligations may find themselves facing unexpected costs or delays during the transfer process.
Understanding these requirements before placing your property on the market can help you plan your finances and prepare the necessary documentation.
Property sales agent commission
When a property is sold through a sales agent, the seller generally pays the commission agreed upon in the mandate.
The commission amount and whether VAT is included should be clearly established before the mandate is signed.
Sellers should ask their property sales agent to explain the commission structure, when commission becomes payable and which services are included.
This information allows homeowners to calculate the approximate amount they may receive after the transaction has been completed.
Bond cancellation costs
If your property is bonded, the existing mortgage bond will generally need to be cancelled when ownership is transferred.
The bank may require advance notice of your intention to cancel the bond, and cancellation attorney fees may apply.
Depending on the bank’s requirements and the notice provided, additional charges may arise.
Contact your bank early in the selling process to understand the cancellation requirements and obtain information about the outstanding balance.
Municipal clearance requirements
Before transfer can be registered, the conveyancing attorney must obtain the necessary municipal rates clearance certificate.
The municipality may require payment of amounts associated with the property before issuing the certificate.
The amounts requested can include advance provision for municipal charges, which may later be reconciled.
Sellers should ensure that municipal accounts are up to date and that any outstanding billing disputes are addressed promptly.
Compliance certificates
Depending on the property and applicable requirements, sellers may need to provide certificates relating to electrical installations, electric fences, gas installations or other regulated systems.
The requirements depend on the property’s installations, location and relevant legislation.
Where inspections identify defects, repairs may be necessary before the required certificates can be issued.
Sellers should establish which certificates apply to their property and allow sufficient time for inspections and corrective work.
Costs associated with sectional title properties
Selling a sectional title unit may involve additional administrative requirements.
The conveyancing attorney will generally need to obtain information from the body corporate or managing agent relating to levy accounts and amounts required for transfer.
Outstanding levies and other amounts lawfully due may need to be settled.
Sellers should also disclose relevant information about the scheme, including known special levies and matters that may influence a buyer’s decision.
Capital gains tax considerations
A property sale may have capital gains tax implications, depending on the seller’s circumstances and the applicable exclusions.
South African tax legislation provides relief for qualifying primary residences, subject to the relevant requirements and limits.
Investment properties and properties owned through companies or trusts may be treated differently.
Homeowners should obtain advice from a qualified tax professional when calculating the potential tax consequences of a sale.
Prepare your financial calculations before accepting an offer
Before accepting an offer, sellers should estimate the proceeds after deducting the outstanding bond balance, estate agent commission and other applicable expenses.
They should also consider the expected transfer timeframe and any ongoing property expenses that may arise before registration.
Preparing these calculations early can help sellers evaluate offers with greater confidence.
At Fitzanne Estates, we encourage homeowners to understand their financial and legal responsibilities before selling. If you are planning to put your property on the market, contact Fitzanne Estates for guidance on the selling process and the preparations that can help your transaction proceed smoothly.