When buying property in South Africa, the advertised price is just the beginning. Many buyers are unaware of the hidden or additional costs that can significantly affect their budget. These costs are often overlooked, yet they play a crucial role in the total financial outlay required to successfully transfer property ownership.
This report outlines and explains these hidden costs to help buyers prepare and budget more accurately.
1. Transfer Duty
- What it is: A government tax levied on the transfer of property.
- Who pays: The buyer.
- When applicable: On properties over R1,100,000 (as of 2025).
- Rates (as per SARS 2025):
- 0% on first R1,100,000
- 3% on R1,100,001 – R1,512,500
- Progressive increase above that
- Hidden cost risk: Buyers often assume the listed price includes this tax, but it doesn't.
2. Transfer Fees (Attorney Fees)
- What it is: Payment to the transferring attorney to handle the legal transfer of the property.
- Who pays: The buyer.
- Amount: Based on the value of the property, following the Law Society’s guideline tariffs.
- Extra charges may include:
- FICA compliance fees
- Postage & petties
- Deeds office fees
- Hidden cost risk: These can amount to tens of thousands of rands, often unexpectedly.
3. Bond Registration Costs
- What it is: If you’re taking a home loan, the bond must be registered at the Deeds Office.
- Who pays: The buyer.
- Includes:
- Bond attorney fees
- Deeds Office charges
- Hidden cost risk: Like transfer fees, these are tiered by property value, and usually not included in loan discussions with the bank.
4. Initiation and Admin Fees (Banks)
- What it is: A once-off home loan initiation fee, and sometimes a monthly admin fee.
- Who pays: The buyer (borrower).
- Typical costs:
- Initiation: ±R6,000
- Admin: ±R69/month
- Hidden cost risk: These are often not well explained during loan approval.
5. Municipal Clearance Certificate
- What it is: Certificate proving that all municipal rates and taxes are paid up.
- Who pays: Usually the seller, but costs may be passed on to the buyer in private deals.
- Hidden cost risk: If municipal debt exists or back-payments are required, the costs can be high.
6. Occupational Rent
- What it is: If you move in before registration, you may pay rent to the seller.
- Who pays: The buyer (occupant).
- Hidden cost risk: Can be negotiated, but not always disclosed upfront.
7. Rates & Levies (Pro-Rated)
- What it is: New owners are required to take over rates, taxes, or levies from the day of transfer.
- Who pays: The buyer.
- Hidden cost risk: Body corporates may require advance payments (e.g., 3 months’ levies upfront).
8. Home Inspection & Valuation Fees
- What it is: Optional but recommended – inspection for structural soundness or valuation for bond approval.
- Who pays: The buyer.
- Hidden cost risk: Often overlooked, yet important to avoid future maintenance surprises.
9. Insurance Costs
- What it is: Homeowner’s insurance (required by banks)
- Life insurance (to cover the bond in case of death)
- Who pays: The buyer.
- Hidden cost risk: Monthly premiums are ongoing obligations that can stretch budgets.
10. Moving Costs
- What it is: The cost of physically relocating.
- Who pays: The buyer.
- Hidden cost risk: Includes moving services, utilities setup, renovations, security installation, etc.
11. Special Levies
- What it is: Once-off levies in sectional title schemes for unexpected repairs or upgrades.
- Who pays: The owner at the time the levy is raised.
- Hidden cost risk: May be payable soon after taking the transfer, if you’re not aware of upcoming projects.
Conclusion
South African property transactions involve more than just the sale price. Buyers must budget for a variety of hidden costs, many of which are non-negotiable and required by law or financial institutions. Being informed and planning can prevent budget overruns, delays, or legal complications.
Recommendations for Buyers
- Request a cost estimate from your attorney before proceeding.
- Use online calculators for bond and transfer costs (e.g., Ooba, BetterBond).
- Always ask for full disclosure of levies, municipal charges, and attorney disbursements.
- Factor in a 10–15% buffer above the property price to cover these additional costs.