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Video: Watch out for property purchasing costs

Sep 10, 2019

I was recently speaking to a young woman who had just bought her first house. She admitted that she had been caught completely off guard by all the expenses she had to incur.

She discovered that buying a house is a lot more expensive than just being able to afford the monthly repayment and having a 10% deposit.

These are some of the costs you need to consider:

Transfer costs include conveyancing attorney fees who handle the transfer of ownership from seller to buyer. The total cost will depend on the value of the property.

Bond Registration costs are charged if  you are applying for a mortgage. You pay another set of attorneys – so it’s double the legal fees. There is also a bank initiation fee on the issuing of a new mortgage. Note that you can negotiate the legal fees with the bank.

Transfer duty is a tax paid on properties exceeding R900 000.

Municipal connections and deposits are required by most municipalities to transfer and connect council water and electricity services. These differ between municipalities and needs to form part of your upfront investigation. For example, Johannesburg charges two months deemed usage as a deposit.

There are also moving costs, telephone and Wi-Fi connections: These will all cost extra and may require installation fees.

You can expect to pay an extra 7% of the value of the property on additional expenses. For example on a property of R600 000 your expenses would be around R40 000 and on a property of R1.2 million your total costs would be around R66 000.
Property purchasing costsDon’t let your dream home become a financial nightmare – do your homework first.


  1. Hi Maya I’m in the dark about the transfer costs thought there is no transfer costs on a property under R1000000 why transfer cost of over R30 000 for a property of R450 000, the registration cost paid to attorneys can be R15 000 but why transfer costs.

    • Which figures are you referring to? Transfer costs relate not only to transfer duty (which is zero under R1 mil) but attorney fees to do the sale and lodge with deeds office. Bond registration is another set of fees.

  2. Hi Maya. Hope you are well. I have a bond of R425 000. The attorney thats handling the bond is charging R15000. And the attorney which is handling the transfer is charging R33000. Is this a fair price? Deposit on property is R600 000. First time home buyer.


    • The transfer cost would be based on the total cost of the property. This could include transfer fees which are a tax. Check the statements to see exactly what the costs are for. That said R33k seems very high. You should be able to negotiate.

  3. Hi Maya

    Any advise on first time “buy to rent” buyers? I am afraid of relying on rental income to subsidize my bond especially during these difficult times but I also want to buy property to rent out specifically on the township market. How do you mitigate the risk of rent default and also how do banks feel about first time buyers buying property to rent it out?

    • When you do the maths assume a 10 month rental income per annum and see if you can afford the mortgage on that basis. This will protect you for at least two months of vacancy.
      There are insurers like Hollard that offer a tenant insurance, so you can look into that. The key is to do a proper credit check and make sure the person is reliable.
      Banks normally only lend based on your existing income (not assuming that you will put in a tenant) but Absa is a bit more flexible on this.
      Watch this interview

  4. Dear Maya,

    Thank you, your tips have helped me a lot.
    I have a bond with Bank X with R692,899.00 and 187 Months left at 9.05% (minimum payment of R698.47 monthly payment and I am Paying R9000 a month, which I increase by R500 every year)
    I got an offer from another bank with the following details: Bond R692,899.00 and 120 months period at 9.05% (Minimum payment of R8865.11 and I would still pay R9000 a month and will increase it at R500 annually). They are also offering me a 50% discount on transfer and bond registration cost.

    Do you think it would be wise to take the offer from the new bank or should I stay with my current bank seeing that the only difference between the two is the duration of the bond?

    Many thanks.

  5. Hi Maya.
    Great article. What would the purchasing cost be if one were to buy a property cash direct from the property developer?


    • A developer would have added VAT onto the property so no transfer duties apply. However you will pay conveyancing fees for registering title deeds

  6. Dear Madam

    I am just above 50 years. i should have bought a house long ago, but because of working on contract basis which were renewed yearly, for more than 14 years, I was reluctant to buy a house. My concern was that, what if my contract is not renewed. I am tired of renting now, I want to buy a house. Can you advise me?

    • If you have conducted your finances well a bank should consider your application – I will get someone to contact you

  7. Thank you Maya I didnt know about other things. thank you. Can I also add that you dont pay some of these costs (Municipal costs, bond registration, transfer costs) when you buying a new property from the developer. Instead they (Bank) add a bank inititaion fee to your loan. But I am not sure about transfer duty when a property is more than R900k.

    My question, Is there no way that one can save on these costs.? I am asking this beacuse anything that has to do with attorneys is very expensive. At times we use the middle man even on things that we can do on our own.

    Please correct me where I am wrong.

    Thank you

    • You make a good point about saving when you buy from a developer. The issue of attorney fees is a very important one. It definitely creates “friction” and adds huge costs to property ownership. You can negotiate with the attorney and with the bank on these costs but they are still high. In fact title deeds is seen as one of the best uses for BlockChain technology so hopefully we will get to a point where property ownership is part of a public ledger and not done through attorneys and title deed offices…

      • Good day Maya

        I recently got approved for a home loan, My question relates to transfer cost and Bond registration.

        Can I negotiate all these costs with the conveyancer to be paid monthly on a monthly basis for a certain period?

        Thank you

        • Firstly you can negotiate costs with the bank. I know for example that FNB is offering big discounts to attract customers. There is no reason you could not discuss this with the conveyancer and come to an agreement to pay monthly. It would however be up to them to agree to it.


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Maya Fisher-French author of Money Questions Answered

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