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For many first-time property buyers, the sheer volume of new terminology can be overwhelming. Here we unpack what these terms means, and why they form part of the property purchasing journey
On your journey to becoming a property owner, you would have had to learn about all the in's and out's that come with this. In our previous blog, we discussed the difference between transfer fees and transfer duty. Here we will look at some of the costs involved with registering your bond and other things relating to taxation on resales of properties.
Bond initiation fee
This is a fee based on your home loan, or bond. It is basically the cost you pay to the bank for processing your bond application. Some banks will charge a standard rate for this service of approximately R6 037 including VAT, while others will charge a base fee and then add on a percentage of the bond amount on top of that.
Property Rates
Once you own a property there will monthly costs to pay and your property rates form part of this. Rates are paid to your local council and are calculated on a list of factors including where your property is located and the size, or square metres, of the property itself and the listed value of the property too. This is a non-negotiable and a legal requirement of owning a property.
Levies
If you own a sectional title property, or a property within an estate then you will have monthly levies to pay. This is a sum paid to the estate for things like general maintenance, and other operational costs. Again, this forms part of the sale agreement when purchasing a property and is not the choice of the buyer. You may notice that you begin to pay levies once the property has been transferred into your name but before you have physically taken occupation of the place. This is because the levies are the responsibility of the owner and are therefore paid by the owner, not the estate developer.
Author: Devmco Realty
