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Don't leave yourself short when buying a property, make sure you consider all the costs…

by , 11 May 2015

Buying a property is likely to be the biggest purchase you'll ever make.

For many first-time property buyers, the biggest concern is saving up a large enough deposit. But don't forget about the other costs you'll have to pay for too.

So what are these other costs?

Read on to find out…

Transfer costs for your property

When you buy a property, one thing you may have to pay is transfer duty. This involves the transfer of the property from the seller’s name into yours.

If the property you’re buying is less than R750,000, you don’t have to pay any transfer duty. But if the property costs more than R750,000, you’ll pay duty on any value above this.

You can expect to pay the following in transfer duty:

  • For properties up to R750,000: Nil.
  • For properties between R750,001 and R1.25 million: 3% of the value above R750,000.
  • For properties between R1,250,001 and R1.75 million: R15,000 + 6% of the value above R1.25 million.
  • For properties between R1,750,001 and R2.25 million: R45,000 + 8% of the value above R1.75 million.
  • For properties priced at R2,250,001 and over: R85,000 + 11% of the value above R2.25 million.

As part of the transfer process, you’ll also have to pay up to three months’ worth of levies or rates, and taxes.

Costs associated with the bond for your property

You’ll need to pay an attorney for bond registration. Make sure you shop around to get a competitive rate for this.

And you’ll also have to pay the bank you get your bond through a bond initiation fee. You can expect to pay between R5,000 and R6,000 for this.

You need to ensure that you have the cash to cover these costs when buying a property.

Bottom line: The costs will vary depending on the property you’re buying, but you’re looking at a minimum of around R20,000 for a property valued at R400,000. The more expensive your property, the higher these costs are.

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Don't leave yourself short when buying a property, make sure you consider all the costs…
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