These are all the ‘hidden’ costs when buying a house in South Africa

The listed price you see on a sales brochure or website do not tell the full story of how much you will need to pay up when buying a house in South Africa.

Steve van Wyk, Seeff’s MD in Centurion, outlined the costs involved in buying a home of R2 million, which includes taxes, administration and insurance fees.

“It is no secret that buying a home is one of the biggest financial commitments you will ever make in your life, but along with the costs of the physical home there are various other fees and charges to keep in mind too,” he said.

Van Wyk said that any prospective home buyers should carefully look at their budget and expenses before considering the big step of purchasing property, noting that “a realistic budget is extremely important before embarking on this journey.”

What costs go into buying a R2 million home

R2 million home Cost
10% deposit R200 000
Transfer duty to SARS R60 500
Conveyancer fees R25 380
Postages and petties R978
Deeds office transfer levy R1 098
Electronic document generation fee R748
Deeds office search fee R242
Local council rate clearance R345

Bank and bond costs on a R1.8 million home loan

R1.8 million bond Cost
Deeds office levy fee R1 098
Initiation fee R5 250
Attorney bond and registration cost R23 910
Postages and petties R978
Electronic document generation fee R1 092
Electricity connection fee R600 – R1 200
Water connection fee R470

The tables above show that on top of the deposit, prospective homeowners would need another R90,000 to handle the various fees, along with another R34,000 for bond costs associated with the purchase.

Van Wyk also noted that VAT at 15% needs to be added to most of these amounts, which push the initial costs to well over R320,000 (including deposit) before even considering the monthly payments that factor.

Monthly costs that need to be budgeted for:

  • Monthly repayments of the bond. At the current interest rate the monthly repayment of a bond of R1.8 million will be around R17,670;
  • Bond monthly admin service fee: R69;
  • Home owners insurance: Banks usually add this to the mortgage amount to protect themselves against claims for flood, fire and hail damage;
  • Insurance on the owner’s life. This is to cover the cost of the property in case of death. The policy will not only cover the outstanding loan amount to the bank, but will also ensure that any dependants have a roof over their head at the time of death;
  • Rates and taxes: due to the municipality for rubbish removal and the maintenance of your area;
  • Water and electricity: due to the municipality for your household’s monthly consumption.

Read: This is what a R70 million-plus home looks like in Cape Town, Durban and Joburg

Latest news

Partner Content

Show comments

Follow us

Recommended

These are all the ‘hidden’ costs when buying a house in South Africa