How net proceeds are calculated
Commission = price × commission % (+ 15% VAT if the agency is VAT registered) Selling costs = commission + VAT + bond cancellation (+ VAT) + penalty + certificates + other Net proceeds = price − selling costs − outstanding bond
Agent commission and bond cancellation fees are estimates based on your mandate and quotes; only the VAT on them follows the official rate.
Worked example
Selling for R2 million with R900 000 still owing
Commission of 6% plus VAT is R138 000, leaving about R962 000 before bond cancellation costs and certificates.
Breakdown
- Selling price
- R2 000 000.00
- Agent commission (6%) Estimate
- −R120 000.00
- VAT on commission (15%)
- −R18 000.00
- Bond cancellation fee (incl. VAT) Estimate
- R0.00
- Compliance certificates Estimate
- R0.00
- Total selling costs
- −R138 000.00
- Less outstanding bond
- −R900 000.00
- Net proceeds
- R962 000.00
Frequently asked questions
Who pays transfer costs when I sell?
The buyer pays transfer duty and the transfer attorney’s fees. The seller pays estate agent commission, bond cancellation costs and the compliance certificates required for transfer.
How much is estate agent commission?
Commission is negotiable and set in your mandate. Rates of about 5% to 7.5% of the price, plus VAT, are common. Some agents offer fixed fees.
Why give 90 days’ notice to cancel my bond?
Banks generally require 90 days’ notice to cancel a bond. If you give less, the bank may charge penalty interest for the remaining notice period.
Do I pay capital gains tax when I sell my home?
The first R3 million of gain on your primary residence is excluded from capital gains tax. Investment properties do not get this exclusion.