In Episode 9 of The Property Buyers Guide, Justina Hamupembe, also known as YourHomeGirl, dives into the often confusing world of property-related costs.
She’s joined by Abe Malherbe, an admitted legal practitioner and conveyancer, to discuss the critical roles of conveyancers, transfer costs, bond costs, and bank administration fees.
Q1: What is the role of a conveyancer in the home-buying process?
Abe:
A conveyancer is a legal practitioner specialising in property transactions. Their role is to ensure the smooth transfer of ownership while safeguarding the interests of all parties involved. From managing large sums of money to ensuring legal compliance, conveyancers handle a variety of tasks, including:
- Preparing and reviewing legal documents
- Ensuring municipal rates and taxes are paid
- Registering mortgages and canceling existing bonds
- Paying transfer duties and stamp duties to NAMRA
Ultimately, a conveyancer acts as a neutral third party, ensuring buyers receive their property and sellers receive their payment securely.
Q2: What are transfer costs and bond costs, and who pays for them?
Abe:
Transfer costs encompass several components:
- Conveyancer’s Fee – A legally prescribed fee charged by the conveyancer for their services.
- Transfer Duty and Stamp Duty – Taxes payable to NAMRA, calculated based on the property’s value.
- Deeds Office Fee – A small administrative fee for property registration.
With the Transfer Duty Amendment Act of 2024, buyers now benefit from higher exemptions. For example:
- Properties up to N$1.1 million are now exempt from transfer and stamp duties, up from the previous threshold of N$600,000.
- This change offers significant savings, particularly for first-time buyers.
Bond Costs are additional fees incurred when securing a mortgage. They include:
- Conveyancer’s Fee – Charged for registering the mortgage bond.
- Stamp Duty – Levied by NAMRA on the loan amount.
- Deeds Office Fee – Administrative cost for registering the bond.
Q3: How has recent legislation impacted these costs?
Abe:
The 2024 amendments have shifted the landscape for property transactions:
- Close Corporations and Trusts: Previously used to avoid transfer duties, these structures now attract the same duties as individual purchases.
- First-Time Buyers: Buyers save significantly with the increased exemption thresholds, making homeownership more affordable.
For example, the cost to transfer a property worth N$1.1 million has dropped from approximately N$39,000 to N$25,000. Sectional title units and bond costs have also seen reductions, offering relief for buyers in today’s tough economic climate.
Conclusion
Justina wrapped up the episode by thanking Abe for his thorough explanation of property costs. Knowing these expenses upfront helps buyers budget effectively and avoid unexpected financial strain.
Stay tuned for more insights on property buying every Friday on The Property Buyers Guide!
You can watch previous episodes of The Property Buyers Guide on https://www.youtube.com/@thebrieflive1690
