PROPERTY PURCHASE COSTS IN SOUTH AFRICA (2025/2026): WHAT BUYERS NEED TO KNOW

Many buyers are surprised by the additional costs that arise during a property transaction. Understanding these costs upfront is essential for effective financial planning and ensures a smooth process from offer to transfer.

This guide provides a clear overview of the typical costs associated with purchasing property in South Africa.

1. Transfer Duty and VAT

Transfer duty is a tax payable to SARS on property purchases above a certain threshold. For the 2025/2026 tax year, properties valued at R1,210,000 or less are exempt. For properties above this amount, transfer duty is calculated on a sliding scale based on the purchase price.

In some cases, VAT may apply instead of transfer duty, usually when the seller is a VAT vendor. The Offer to Purchase should state whether the price includes VAT. If it does not, the purchase price is assumed to include VAT.

At Ulrich Roux & Associates, we guide clients through the correct tax treatment to give you peace of mind.

2. Transfer Costs

   
   

The purchaser usually pays transfer costs to the conveyancing attorney handling the property transfer. These fees are based on recommended tariffs and updated annually.

Transfer costs typically cover:

• Conveyancing attorney’s professional fees;

• Deeds Office registration fees;

• Disbursements, including postage, document generation, and FICA compliance.

3. Bond Registration Costs

If the property is financed with a home loan, bond registration costs apply. These are paid to the bank-appointed bond attorney and usually include:

• Bond attorney’s fees;

• Deeds Office registration fees;

• Disbursements (postage, documents, FICA compliance);

• Bank initiation and administration fees.

The bank may also impose additional loan conditions that incur extra costs.

4. Cash Guarantees

Some purchases require a cash guarantee to secure the property. Banks may charge fees for issuing guarantees, and additional costs may apply if a guarantee expires before transfer.

5. Investment of Deposit on the Purchase Price

A deposit is often payable under the Offer to Purchase and is held in trust by the transferring attorney. Deposits may be invested on a purchaser’s instructions until registration. The investment will attract a small administration fee. Our firm ensures deposits are securely and transparently managed.

6. Occupational Rent

If the purchaser occupies the property before transfer, occupational rent may apply. The rate is usually set in the offer or its addendum. We assist with calculating and arranging occupational rent.

7. Home Inspections and Building Plans

Many buyers obtain a professional home inspection before finalizing the purchase.

If approved building plans are required by the purchaser, the Offer to Purchase must specify who covers the cost. If not specified as the responsibility of the seller, the purchaser typically pays. We help clarify these obligations upfront.

8. Auctioneer Premiums

For properties purchased at auction, the purchaser may pay a premium to the auctioneer. This is usually offset against any deposit, with the purchaser responsible for topping up the purchase price if needed.

9. Utility Accounts and Deposits

After registration, the purchaser must open accounts for services billing connected with the Property in the purchaser’s name. Deposits may be required for municipal authorities or Eskom, and the body corporate or Home Owners Associations.

For your convenience, we can assist additionally with opening your municipal account helping to make the transition into your new property seamless.

10. Timing of Payments

Many costs, such as transfer duty, transfer costs, and bond registration costs must be paid upfront before registration can take place. Property transactions involve several interrelated legal and financial processes, each with its own cost implications.

Buying property is one of the most significant financial decisions most people will make. Understanding the full cost of a transaction is essential to avoiding unexpected financial strain.

As part of our commitment to consumer education, we encourage purchasers to seek clarity on all costs upfront and to work with qualified professionals who can guide them through the process.

For a cost estimate and expert advice, contact Ulrich Roux & Associates today. We will make your property transaction smooth, transparent and stress-free.

Tarryn Lee Venter

(Lead Conveyancer)

Samantha Schalkwyk

(Senior Conveyancing Secretary)

02 April 2026

This article is intended for general informational purposes and does not constitute legal or financial advice. Costs may vary depending on the transaction. Professional advice should be obtained for your specific circumstances.

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