Cost to buy a house in South Africa

“I can afford that price, can’t I?” Sure you could, if the price tag on a new home was all you had to pay. However, the fact of the matter is, buying a house comes with a lot of added costs. This often sets a lot of people up for a financial crisis as they just don’t know how much it really costs to buy a house in South Africa.

Take a look at the extra costs above the house’s price tag and then reassess whether you can afford the house.

Bond registration and transfer costs

Unfortunately, these costs are unavoidable. Most property lawyers will have a bond and transfer calculator on their website that you can use to work out the cost online. Make sure you have funds available for bond registration and transfer costs before you purchase a house. Here’s a breakdown of the bond registration and transfer costs you can expect:

Transfer Duty – If the value of a property is above R 900 000, you will have to pay a Transfer Duty, which is a tax payable to SARS. This ensures that the house is transferred from the seller’s name to the buyer’s name. Before the transfer of property goes through, the amount is paid to a Transferring Attorney who is responsible for paying an amount to the South African Revenue Services on the buyer’s behalf. The transfer duty amount depends on the price of the property. Read more here.
Transferring Conveyancing Fee – This is the fee paid to the Transferring Attorneys that transfer the home from the seller’s name to the buyer’s name and register the property in the buyer’s name. This amount may differ depending on the law firm you use.
Property Transfer Deeds Office Registry Fee – The Deeds Office charges a fee for the Title Deed and legal transfer and registration of your new home into your name. This amount is based on the purchase amount.
Bond Registration Conveyancing Fees – Like with the Transferring Conveyancing Fee, this fee is for the service provided by the Bond Registration Attorneys. The fee is based on tariffs suggested by the Law Society and must be paid before your bond is registered. This amount may differ depending on the law firm you use.
Bond Registration Deeds Office Registry Fee – The Deeds Office will require money for the legal registration of your bond. This amount is based on the purchase amount.
Added Attorney Costs – The Transferring Attorneys and Bond Registration Attorneys will add on charges to cover costs such as posting documents to the bank, estate agent, Deeds Office, etc. This amount may differ depending on the law firm you use.

Other costs involved in buying a new home

Registering water and electricity connection – For freehold properties, you will have to register your water and electricity connection. This will probably cost over R 1 000. Plus, once the services are connected, you will have to pay for them every month.

Monthly rates and levies – Rates and levies can be a financial punch in the stomach. If you have, for example, purchased a sectional title, the body corporate of the apartments will make you pay a set levy monthly for the general upkeep of the buildings, including sewage usage, garbage, general maintenance of the area and garden services. It also covers taxes, which are calculated against the value of your property.

Insurance – Homeowners insurance will ensure cover over any structural damage to the property. This amount can be included in your monthly bond repayments. You may also consider covering your personal assets so that if any of your valuable items are stolen or damaged, you won’t lose money.

Home maintenance and security – Cleaning, repainting and other general work may need to be done before you can comfortably settle into your new home. Make sure you keep money aside for basic household maintenance and security. This will ensure that your home is safe and pleasant to live in.

Buying a home is expensive and comes with a lot of unexpected costs. Make sure you do thorough research on the area the property is situated in as well as the actual property itself to ensure that you are making a wise purchase.

If you are battling to tackle debt, contact Debt Rescue today. We’d like to help you achieve financial security.