Buying property is one of the most exciting financial decisions you can make, whether it’s your first home, a long-term investment, or an upgrade for your growing family. But for many South African buyers, there’s a common surprise along the way: the hidden costs that come after you sign the offer to purchase.
Understanding these additional expenses is crucial for proper budgeting and for ensuring a smooth, stress-free transfer process. At COD Bridging Finance, we see first-hand how often these costs catch buyers off guard and how bridging finance can help fill the gap when short-term cash flow is tight.
Here’s what to look out for, and how to plan better:
1. Transfer Duties
If you’re buying a property for more than R1 210 000, you’ll likely need to pay transfer duty, a government tax payable to SARS before the property is officially transferred into your name. This cost can range from a few thousand to several hundred thousand rand depending on the property’s price. And here’s the catch, it needs to be paid upfront.
Tip: Use the SARS Transfer Duty Calculator online to estimate this cost before you put in an offer.
2. Attorney and Legal Fees
A conveyancing attorney handles the legal side of the property transfer, and their services are not included in your bond. These legal fees cover items such as deeds office registration, FICA verifications, and administrative costs.
Budget range: Typically 1% to 1.5% of the property’s value, plus VAT.
3. Bond Registration Costs
If you’re financing your purchase with a home loan, your bank will appoint a bond attorney. Their fee is separate from the conveyancer’s and includes registering your mortgage with the Deeds Office.
4. Rates Clearance, and Municipal Accounts
Before a property can be transferred, the municipality requires all outstanding rates, taxes, and utilities to be cleared. The seller usually pays this, but many municipalities ask for advance payments covering 2–6 months.
Sometimes, the buyer ends up reimbursing the seller or footing certain municipal costs post-transfer.
5. Moving and Utility Connection Fees
Not exactly hidden but often underestimated. Moving costs, new furniture, internet installations, water and electricity connections, and security updates all add to the initial post-transfer expenses.
Many buyers find themselves cash-strapped in the weeks leading up to the transfer. Buying property in South Africa is an incredible investment opportunity, but preparation is key. Don’t let hidden costs derail your plans. Budget wisely, ask your estate agent and attorney for a breakdown of all expected expenses, and consider bridging finance to ease the financial pressure.
If you’re in the process of buying property and want to avoid surprises, get in touch with COD Bridging Finance today. We’ll help you move forward with confidence.
