Property Buying Tip #6 – Understand the Costs

by | Mar 11, 2018 | Property Buying Tips | 0 comments

When buying a property there are some obvious costs, such as a bond repayment.  Then there are costs you sort of heard of, but not 100% sure what it means, like transfer costs.  And then there are the costs that you didn’t even know of and you get a surprise later!  In our Property Buying Tip #6, we are going to look at some of the costs you can expect when purchasing a property.

Once-off Costs

When you are in the process of purchasing a new property, there are some once-off costs associated with the deal.  These costs normally form part of the transfer process and getting the property registered in your name.  Here are some once-off costs you can expect:

Transfer Duty & Costs

In our previous article (Property Buying Tip #7 – Understand the Process) we covered the property registration process and parties involved, such as the different attorneys.  These attorneys are responsible for the transfer and registration of the property, and obviously there services are not free of charge.

Transfer Cost is the fee charged by the Transferring Attorney to affect the transfer of the property.  The fee is based on tariffs recommended by the Law Society, but may slightly differ from one firm to another.

Transfer Duty is a tax levied on the value of any property acquired by any person by way of a transaction or in any other way. For the purpose of Transfer Duty, property means land and fixtures and includes real rights in land, rights to minerals, a share or interest in a “residential property company” or a share in a share-block company.  Here is a schedule of how Transfer Duty is calculated:


Value of the property (R) Rate
0 – 900 000 0%
900 001 – 1 250 000 3% of the value above R900 000
1 250 001 – 1 750 000 R10 500 + 6% of the value above R 1 250 000
1 750 001 – 2 250 000 R40 500 + 8% of the value above R 1 750 000
2 250 001 – 10 000 000 R80 500 +11% of the value above R2 250 000
10 000 001 and above R933 000 + 13% of the value above R10 000 000


NB Note:  If the Seller is VAT registered (like most Developers), you will not be charged Transfer Duty, but the purchase price will include VAT.  This is one of the biggest benefits buying directly from a Developer because you might end up saving a lot of money in Transfer Duties.

Bond Registration Costs

Bond Registration Cost is the fee charged by the Bank appointed Bond Attorney to register a bond over the property in favour of the bank.  The fee is based on tariffs recommended by the Law Society, but may slightly differ from one firm to another.

Bank Initiation Fee

This is a once-off bank fee.  The current rate is R5 985, and most Banks will include this fee into your newly registered bond, meaning it doesn’t have to be paid cash additionally.

Utility Deposits

You might find that some local authorities and/or developers will require a utility deposit.  This will vary from property to property.

 Postage, Petties & Fica

With the registration process, there will always be small amounts due to paperwork and other charges.  They are not significant enough to be concerned with, but just be aware of them.

There are a couple of online calculators available to assist you in estimating your bond registration and transfer costs.

Monthly or Recurring Costs

Once you have moved into the property, there will be new additional monthly costs associated with your property.  Here is a list of some of the monthly costs you can expect:

Bond Repayment & Occupational Rent

When moving into a property, you will either be paying your bond repayments or occupational rent.  If you are occupying the property prior to registration (when your bond repayment starts) you will be liable for occupational rent as laid out in the Sales Agreement.  We will cover occupation vs. possession in more detail in a future article.


If you are living in a Sectional Title development, or a security area with shared services (boundary wall, security, etc.) you will be paying a monthly levy.  This levy will contribute to the upkeep of the complex, security services, all amenities and future maintenance in the case of Sectional Title.

Rates & Taxes, Refuse Removal & Sewer

Every property is subject to charges by the local authority who services the property.  These will cover all services and taxes and is paid on a monthly basis.  The charges might differ from authority to authority.  Here is a rough guideline:

Rates & Taxes:  The municipal valuation of your property – R200 000 x R0.007345 = Rates & Taxes for entire year.  Divide by 12 for a monthly figure.

Refuse Removal:  This will be levied based on the value of the property, ranging between R150 – R300 per month.

Sanitation (Sewer):  This will differ from metered to prepaid installations.  Metered private dwellings with an erf size up 300m2 will pay roughly R170 per month.

Other miscellaneous property charges

 With the ownership of a property comes other various charges that you need to be prepared for.  A list of them include, but are not limited to:

  • Building Insurance (Included in levies of Sectional Title)
  • Security (Included in levies of Sectional Title)
  • Building Maintenance (Included in levies of Sectional Title)
  • Normal upkeep & maintenance
  • Gardening (Included in levies of Sectional Title)


We hope that article gave you more insight into the costs involved with buying and owning a property.  Stay tuned for more Property Buying Tips.


*Although every effort was made to ensure the accuracy of our calculations, Foce Property Investments and its subsidiaries accept no liability in respect to any errors contained herein.  Under no circumstances will Foce Property Investments be liable for any loss or damage arising from these examples

Pin It on Pinterest