Purchasing a property is likely one of the most exciting and sizeable types of investments you will ever have to budget for. Since it is such an important milestone, we want you to be well informed before committing to this purchase. In addition to the property value, there are other fees that also arise and planning ahead for them will ensure your budget remains on track. For instance, statutory and legal fees are required closing costs and being aware of these in advance can really make all the difference in keeping abreast of the expenses and enjoying the home buyer process.
This often refers to Stamp Duty, which are payments that must be made to the Board of Inland Revenue so that the Deeds of Conveyance and Mortgage can be registered.
Stamp Duty can apply to properties with both a house and land, or to land only. For residential properties with both a house and land, where the value of the property exceeds $850,000.00, the Stamp Duty is charged as a percentage of the property value and can range from 3% to 7.5%, depending on the value of the property.
However, where land only is being purchased, Stamp Duty is payable where the value exceeds $450,000 and is also calculated as a percentage of the property value. The Stamp Duty can range from 2% to 7%, depending on the value of the property.
Stamp Duty also applies to a Deed of Mortgage. Where the sum secured by the mortgage exceeds $850,000, the Stamp Duty charged is 2% of the mortgage value.
While some people shy away from legal terms or costs, doing your research can help demystify this topic and add clarity. An attorney prepares the Deed of Conveyance and the Deed of Mortgage, as such, there are legal fees associated with the preparation of these deeds. There can also be other legal costs, such as the Title Search Fees whereby the ownership of the property is traced to ensure that the vendor is legally entitled to sell the property.
There are other costs that must be considered when purchasing a home. There is the cost of the valuation report; the property charges as applicable, such as Wasa Clearance; Land and Building Taxes; Lease Rent. By taking these into account, you can be a lot smarter when evaluating various housing options. Being better informed about the types of costs involved, you can factor in what the total price tag is more likely to be and approach the home-buyer journey in much more prepared manner that sits well with your budget.