There are five main costs associated with buying a property in South Africa - the costs associated with the actual property purchase, and the costs associated with any bond (home loan) that you may take out to fund your purchase. Here are some of the associated fees you are expected to pay.

What are Transfer Duties?

Transfer duties are a percentage of the cost of the home and are determined by the buyer's legal status legal entities, such as a company or trust, are required to pay 8% of the value of the property, while private buyers pay transfer duties on a sliding scale based on the value of the property.

According to SARS, the transfer duty fees are as follows:

• If the value of the property is R1 000 000 or below, then there is no transfer duty
• If the value of the property is between R1 000 001 and R1 375 000, then the fees are 3% of the value above R1 000 000
• If the value of the property is between R1 375 001 and R1 925 000, then the fees are ​R11 250 + 6% of the value above R1 375 000
• If the value of the property is between R1 925 001 – R2 475 000, then the fees are ​R44 250 + 8% of the value above R 1 925 000
• If the value of the property is between R2 475 001 – R 11 000 000, then the fees are R88 250 +11% of the value above R2 475 000
• If the value of the property is ​11 000 001 and above, then the fees are R1 026 000 + 13% of the value exceeding R11 000 000

** Please note that the fees quoted are from 1 March 2022 until 28 February 2023.

Conveyancing costs/Transfer fees

While the conveyancing attorney is appointed by the seller, the buyer is responsible for the costs of the "Transfer fee". This fee is payable to the transferring attorney for transferring the property into your name. As with the above fees, they're determined on an upward sliding scale in direct proportion to the cost of the properties being purchased. The calculated fee is required to be paid before or simultaneously with the registration/transfer of the property.

Costs are based on a sliding scale and there's a recommended amount that conveyancers should charge.

What are the Bond Registration Fees?

For the service of registering your bond at the Deeds Office, you're likely to be charged bond registration fees or attorney costs. The amount is fixed according to the amount of your home loan.

When do I pay the amount? It's a once-off payment that is paid before the registration of your bond.

Who do I pay? The payment is made to the Registering (Bond) Attorneys.

Who is the money for? The Deeds Office.

** Please note that the fees quoted are from 1 April 2022.

Your bank's valuation fees

It's the bank's job to do a property valuation to check whether the present market value of the property covers the amount that you want to borrow. Once you've applied for a home loan, the bank will send a representative to value the property. Banks and other valuers use different tools to do a market-related price valuation, one of which will be a Comparative Market Analysis (CMA). This helps set a realistic value for the home by comparing it to similar properties in the area that have recently sold. However, owing to the introduction of the National Credit Act, banks no longer charge their clients' valuation fees. Instead, this fee is now incorporated into the bank's initiation fees.

Your bank's initiation fees

This is a once-off fee charged by the bank for processing the bond application and getting into a credit agreement with them. Some banks work on a base fee + a percentage of the loan amount, other banks charge a flat rate, but the maximum initiation fee charged won't exceed R 6 037.00 (incl. VAT). It's best to budget for this amount beforehand.

5 things to consider when buying property

1. Make a careful list of your basic needs

It's always good to have a list of needs vs nice-to-haves. Needs should include, for example: 3 bedroom house, living area, kitchen, bathroom. A nice-to-have would be a pool and an entertainment area, as these aren't essentials.

2. Write down what appeals to you

Look around your current home and note the things you most like about it, even if it's a rental property. Also, note the things that don't appeal to you. This will give you a good idea of what works for you and what you need to consider when you look at homes for sale.

3. Discuss what's important to other family members

Remember you're not the only one living in the home. Have an open, honest discussion with them. Spend time with them and discuss what's most important to each person when compiling your house-hunting master list.

4. Plan well ahead - never buy in a rush

Plan ahead. It isn't an item of clothing you are buying. It's a huge investment.

5. Seek advice and be ready to commit

Finally, be ready to commit. Seek advice from a reputable mortgage originator to make sure you have your finances in order and can qualify for a home loan before you start your search for the right home.