23/07/2026
Buying a Property? Here's What You'll Pay – and When
Avoid unpleasant financial surprises by being properly prepared for the various costs that you, as the Purchaser, will face. A proper budget and cash flow forecast will not only ensure the affordability of your dream home, but also cover all the associated costs as and when they become due.
Before you submit an offer to purchase (OTP), it’s essential to understand exactly what your property purchase will cost. Herewith a guideline to be used for your cash flow forecast; exclude any items that do not apply to your circumstances, and remember that every property transaction is unique, so this guideline should not be used as an exhaustive list:
Costs payable before transfer:
1) Deposit: Most Sale Agreements require the purchaser to pay a deposit, typically 5% or 10% of the purchase price.
2) Home loan initiation fee: Banks generally charge an initiation fee when granting a home loan. This often includes the property valuation fee and is usually added to your loan amount, although it's worth confirming this with your bank.
3) Homeowner's insurance and life cover (where required): Many banks require homeowners' insurance and, in some cases, life cover before registering the bond. Remember to budget for the first premiums.
4) Balance of the purchase price: If your deposit and home loan do not cover the full purchase price, the outstanding balance must be paid before transfer can take place.
5) Transfer duty: Unless the sale is subject to VAT, transfer duty is payable to SARS before transfer. This property tax applies to property purchases exceeding R1 210 000,000 and is calculated on a sliding scale based on the purchase price.
6) Transfer costs: The transferring attorney (conveyancer) charges professional fees based on the purchase price. Additional costs typically include F**A verification, deeds office searches, postage and petties, and other necessary disbursements.
7) Bond registration costs: If you are financing the purchase with a home loan, the bank will appoint a bond registration attorney. Their fees are based on the value of the loan and generally include professional fees, F**A charges and the prescribed Deeds Office registration fee.
8)Municipal rates clearance fee: This fee is often charged by the attorneys for the application of municipal clearance figure to the relevant local authority.
9) Levy clearance (if applicable): If the property forms part of a sectional title scheme or homeowners' association, the body corporate or HOA will require advance levy payments before issuing a Levy Clearance Certificate.
10) Occupational rent (if applicable): Should you take occupation of the property before registration, you will be liable for occupational rent (sometimes referred to as occupational interest), as agreed in the sale agreement.
11) Utility deposits: Some municipalities require deposits when opening water and electricity accounts. Be sure to establish whether these will apply in your area.
12) Moving expenses: Don't forget to include the cost of your move, as this is often overlooked when budgeting for a property purchase.
Ongoing monthly costs after transfer:
Include bond instalments, municipal rates and taxes, levy payments (if you buy in a sectional title or HOA), utility charges, insurance premiums for the property and the contents, etc.
Once-off costs after transfer:
If you plan to do alterations or repairs, redecoration, garden revamps, furniture replacement or anything similar; add these costs to your budget. For long-term planning, set aside a budget for ongoing home maintenance.
Feel free to contact our offices, should you have any questions in this regard.
