Additional Cost when buying a property. What should i plan for?

We all know how exciting the prospect of buying a home is but before you get too excited you need to consider a lot of accompanying elements such as location of the home, the costs associated with acquiring this home etc. This article focuses on the costs associated with buying a home. There is a common consensus across the board that buying property in South Africa, like most countries, is very expensive. This becomes an even bigger truth when you realistically look at all the hidden costs that are associated with buying and transferring property into the buyer’s name.

To illustrate the above we look at the following costs:

  • Cost associated with the actual property purchase ;
  • Costs associated with any bond (the loan from the bank) should you require one and ;
  • Other sundry expenses and disbursements that you should also be aware of.



Costs (yes as in plural) associated with the actual property may include the following:

Conveyancer’s fees:

These are what people commonly refer to as lawyer fees. Conveyancers (like most specialists) do not come cheap. What may seem even more unfair is that although the property belongs to the seller it is the buyer that needs to pay the conveyancers fees even though the conveyancer acts on instructions provided by the seller. Conveyancer’s fees are charged depending on the value of property being purchased. This means that the more expensive your property is the higher the conveyancer’s fees.

Property Search Fees

This is done by the conveyancer for purposes of ensuring that there are no conditions on a title deed an example of this would be servitude. This has a cost implication of anything from R 75.00 to R 200.00

Financial Intelligence Centre Act fees

This Act affectionately referred to as FICA places an obligation on conveyancers to verify the identity of their clients prior to establishing a business relationship with them. This includes requesting and verifying their identity documents and proof of residential address and subsequently storing same at their offices for a period of at least five years .This exercise alone will cost you anything from R 200.00-R 500.00.

Rate Clearance Certificate

The conveyancer needs to obtain a rate clearance certificate from the municipality to verify that there are no outstanding rate and taxes owing by the seller. This has a cost implication of anything from R 165.00 (and yes it is the buyer that pays for this as well). Further the buyer will have to pay at least four month’s rates and taxes in advance.

Deeds office Fees

The fees for transferring property are charged at a sliding scale according to the purchase price of the property .This roughly means the following:

If property is R 150 000.00, assuming you can still find a property with this price, or less the deeds office fees will be R 70.00. If the property cost is over R 300 000.00 up to R 500 000.00 the deeds office fee will be R 550.00. If the property is over R 500 000.00 and up to R 1000 000.00 the deeds office fees will costs you R 650.00 etc.


Transfer Duties

This relates to the tax charged by government on property transactions. This also works on a sliding scale .According to the SARS transfer duties applicable as of the 1st of March 2017 are as follows:

Value of Property Transfer Duty
0-900 000.00 0%
900 001.00- 1250 000 3% of the value of the property above 900 000
1 250 001-1 750 000 R 10 500+6% of the value above R 1250000
1 750 001-2 250 000 R 40 500+8 % of the value above R 1750000
2 250 001-10 000 000 R 80 500+ 11% of the value above  R 2 250 000
10 000 001 and above R 933 000 + 13% of the value above R 10 000 000


The cost of buying a house may also include Home owners association fees as well as posts and petties.

Costs associated with attaining a bond from the bank.

If your head isn’t spinning enough yet, we now focus on the costs associated with the home loan or the bond. When you apply for a home loan there are 4 parties you need to be aware of and will subsequently need to pay namely:

  • The bank (bond) fee – this is a once off fee that is charged by the bank for processing your loan application it differs from different banks and may cost up to R 5 700.00
  • SARS – Vat is charges at 14%  of the total conveyancers fees
  • The attorney (conveyance)- Conveyancer’s fees are charged according to the size of your bond and may range from 0.7- %12%
  • And the Deeds office – these are also dependent on the size of the bond and starts from R 200.00

www.sahomebuyers.co.za gives recommended guidelines of fees for the conveyance of immovable on the table below. Please note that the calculations below were done in 2013 and all related costs have significantly increased since then. Please also note that these are general calculations and should not be solely relied upon.

Value of Property 1 million 2 million 3 million
Transfer duty (Government tax) R 12 000 R 77 000 R 317 000
Transfer fees R 14 800 R 20 600 R 38 100
Bond costs for a 50% bond R 7 500 R 12 200 R 19 500
Total  fees R 34 300 R 109 800 R 374 600
Total amounts required for the purchase of the property R 1 034 300 R 2 109 800 R 3 374 600



  • Before committing to buying a home speak to a professional about how much it would cost to buy the property.
  • Have a discussion , if you can, with the current owner of the property about all costs related to maintaining this property discuss things such as rates etc this may save you a lot of future anguish .
  • Ask as many questions as you can and get as much clarity on issues you don’t understand especially when it comes to costing because ultimately this is a 20 year old contract that you need to fulfill and a lot of your  hard earned money will go towards this  property

Comments are closed.


Subscribe to our newsletter and stay up to date with everything legal.


Complete your details below for an obligation free Legal Cover Quote