Municipal vs fair market value

What defines the market value of your property? The definition of market value is the price paid by a willing buyer to a willing seller in an open market transaction. Banks consider it to be their valuation or the purchase price agreed upon - whichever is the lowest. When there is a large discrepancy between the municipal valuation and the purchase price, SARS will return the deed of sale with a query as to why the marked difference existed. To avoid the possibility of paying higher transfer duty, sellers must ensure that their municipal valuations are accurate while buyers should request municipal valuations. In short, as with almost all property transactions, the parties should do their research carefully.

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