A variety of fees (also called closing or completion costs) are payable when you buy a property in South Africa, including those detailed below.
Before signing a preliminary contract, check exactly what fees are payable and have them confirmed in writing.
In addition to the fees associated with buying a home, you must also take into account the running costs. These include local property taxes, building insurance, contents insurance, standing charges for utilities, community fees for a community property, garden and pool maintenance costs, and a caretaker’s or management fees if you leave a home empty or let it. Annual running costs usually average around 2 to 4 per cent of the cost of a property.
Transfer duty is a tax levied on the transfer of ownership of fixed property. If you are buying as a company, a close corporation or a trust (sometimes called a ‘legal entity’), transfer duty is levied at a flat rate of 10 per cent of the purchase price. If you are buying as an individual (officially termed a ‘natural person’), duty is calculated on the following scale: If you buy a home in South Africa, you must pay transfer duty on the value of the property above R500,000 (€51,840). Duty is levied at 5 per cent on the value between R5000,000 and R1,000,000 (€103,680), and at 8 per cent on any value over R1,000,000.
| Value (R) | Duty Rate (%) | Cumulative Duty (R) |
| Up to 500,000 | 0 | |
| 500,001 – 1,000,000 | 5 | |
| Over 1,000,000 | 8 | 25,000 |
If you are buying a property to a developer registered in VAT (Value Added Tax), you will pay VAT instead of the transfer duty.
These are calculated on a sliding scale and amount to between 1 and 2 per cent of the purchase price, depending on the value of the property.
Bank inspection fees are around 0.2 per cent of the valuation, and the mortgage arrangement fee is around 1 to 1.5 per cent of the loan amount.
If you buy a new property, you must usually pay for electricity and water connections (and occasionally gas, but it’s little used in South Africa) and the installation of meters. You should ask the builder or developer to provide the cost of connection to services in writing. If you buy a resale property, you must usually pay for the cost of new contracts, particularly water.
Other fees may include surveyor’s or inspection fees, architect’s fees and the cost of moving house.
Note that stamp duty was abolished in the 2004 budget but is still (erroneously) mentioned on many websites dealing with buying property in South Africa.