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First time property buyer – things to consider

Household Finance

First time property buyer – things to consider

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There are many hidden costs and responsibilities that come with purchasing a property – especially for first time buyers. I have worked in the Conveyancing department of an established Pretoria law firm and have picked up some information that may assist you in the future.

Purchasing a property involves certain costs that may not necessarily be accounted for in the purchase price. Outside of the purchase price and the interest associated with a mortgage bond, the purchaser must be aware of the following costs they may incur;

  • Transfer costs
  • Transfer duty or VAT
  • Deeds office costs
  • Home Owners Association charges

To add to this the property may be subject to certain servitudes and responsibilities that give 3rd parties the right of use of roads, waterways and other items located on the property. It is important for the potential property buyer to find out if the potential property is subject to any of these as they may affect the buyer’s enjoyment of the property.

I will explain the abovementioned costs in greater detail below;

Transfer Costs

A property buyer is required to pay transfer costs to the attorneys/conveyancers responsible for the transfer of the property. There is a direct correlation between transfer costs charged and the market value of the property. The higher the market value of the property, the higher the transfer costs that will be charged to the buyer. The minimum a buyer can pay on transfer costs at the moment is R6721.10.

Related: Save yourself 10 years of bond payments

Transfer duty

Transfer duty is a tax that must be paid over to SARS if the property sold has a market value over the amount gazetted by the Minister of Finance. As it stands Transfer duty must be paid on a property that has a market value over R900 000.

  VALUE OF PROPERTY (Rand)          RATE
0 – 900 0000%
900 001 – 1 250 0003% of the value above R900 000
1 250 001 – 1 750 000R10 500 + 6% of the value above R 1 250 000
1 750 001 – 2 250 000R40 500 + 8% of the value above R 1 750 000
2 250 001 – 10 000 000R80 500 +11% of the value above R2 250 000
10 000 001 and aboveR933 000 + 13% of the value above R10 000 000



If the seller of the property is VAT registered or a VAT vendor, then VAT at 14% is charged instead of transfer duty. The 14% must be paid on top of the agreed purchase price regardless of the market value of the property. In any transaction, either VAT or transfer duty is charged but not both.

Deeds office costs

Deeds office costs are the costs charged by deeds office for processing property transfers, bond registrations, bond cancellations and registering of servitudes. These costs are paid by the Conveyancer and then charged to the purchaser.

Home Owners Association charges

The property purchased may fall under a home owners association. The home owners association may subject the property to certain rules and costs that must be adhered to and paid before or after the property is bought. It is always wise to find out if the property prospective purchase is falls under a home owners association. This information will help the prospective owner to prepare for any hidden costs that may be incurred.

I sincerely hope that this piece assists the reader and prepares them on their hunt to purchase a property. In my next piece I will delve deeper into the types of servitudes that a property may be subjected to. May God bless you on your search for a home or a property.



Khaya Moyo is a candidate attorney currently serving his articles of clerkship at Couzyn, Hertzog and Horak attorneys. Khaya completed his BCom LLB at the University of Pretoria and is a avid soccer fan.

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