The Costs of Buying a Home

As well as the purchase price, there are a number of other big expenses when you buy a home. Transfer Duty is paid to South African Revenue Service every time a property changes hands. No transfer duty is payable in respect of a new purchase from a Developer. It's calculated according to the purchase price of the house. The purchase price includes VAT which is payable by the Developer. If the home is bought for R500 000 or less, no transfer duty is payable. This value is reviewed periodically by the Minister of Finance.

Transfer Duty and the transfer costs may be your biggest expense in purchasing your property. Transfer Duty and Transfer Costs are calculated on a sliding scale of payments. If you take out a loan to buy your home, there is also the cost of registering the Mortgage Bond. This is the document which pledges your property to the lender and it also gets registered in the Deeds Office. There are also other smaller costs that you may need to allow for e.g. property valuation fee and the lender's administration fee.

The good news is that some lenders add in the cost to the loan amount, but be sure to ask your lender for a breakdown of all the costs you will be expected to pay.

Here is a table of estimated basic costs to give you an idea of what to expect:

There are also other variable costs to be added e.g. FICA fees, Electronic Instruction fees, Posts and Petties and any other disbursements. These amounts may differ from Attorney to Attorney and from transaction to transaction.