Saving up a deposit for your home is a massive financial victory. You sacrificed weekend trips, cut back on eating out, and watched that bank balance climb until you finally hit your target. So, it can come as a surprise to discover that the deposit is only one part of the upfront costs.
Buying a home remains one of the best financial moves you'll make, but it's often the additional buying costs after your offer is accepted that many buyers don't fully anticipate. Here's a look at the most common upfront costs and how you can prepare for them.
Deposit
Even though we’ve mentioned it, the deposit often brings one of the biggest surprises. Buyers easily underestimate what they need or have a false sense of security from the possibility of 100% home loans. Zero-deposit bonds cover the purchase, but you still need cash on hand for essential closing costs.
- Save a buffer: build extra savings for upfront buying costs beyond your deposit.
- Protect emergency cash: keep deposit funds separate so your safety nets remain intact.
- Get pre-approved: uncover exact upfront costs early.
- Explore subsidies: apply for grants like the First Home Finance (previously FLISP).
- Use a bond originator: they will negotiate better overall loan terms and lower interest rates.
Bond registration
When using a loan, banks appoint a bond attorney to register your bond at the Deeds Office. Their once-off fee is tied directly to your loan amount and paid upfront before registration. Remember: these attorney costs are separate from standard conveyancing fees.
- Capitalise fees into the loan: some lenders offer qualifying first-time buyers home loans of more than 100% to help cover upfront costs.
- Claim bank discounts: major lenders like Absa, Nedbank, and Standard Bank offer first-time buyers up to 50% off attorney registration fees.
Conveyancing (transfer attorney) fee
This covers the legal process of transferring the property into your name. The seller appoints the conveyancing attorney, but the buyer pays the bill. These once-off fees are based on the property's purchase price and are payable before the transfer is registered.
- Ask for an estimate upfront: Request a written estimate of the conveyancing costs before signing the Offer to Purchase so you can budget accurately.
Transfer duty tax
This cost is a mandatory tax paid by buyers acquiring property. Calculated on a progressive sliding scale, properties valued at or below R1,210,000 are completely exempt. Unlike attorney conveyancing fees, this is a non-negotiable government tax paid directly to SARS.
- Use a transfer duty calculator: estimate the amount before making an offer, so you aren’t caught unawares.
- Buy a new development: by purchasing directly from a developer, prices include VAT, eliminating transfer duty entirely.
- Stay below the threshold: buying any other property under the exemption limit also cuts out this tax.
Occupational rent
If you move into the home before the property is officially transferred into your name, you may need to pay occupational rent to the seller. This monthly fee compensates them for using the property while it remains in their name, often costing around 1% of the purchase price.
- Move in after registration if possible: this avoids occupational rent altogether.
- Discuss the terms upfront: confirm whether occupational rent applies and how much it will cost.
- Negotiate the rate: the occupational rent amount may be open to discussion before signing the offer to purchase. Occupational rent is agreed in the Offer to Purchase.
Moving costs
Moving day comes with more than just boxes. This includes hiring removal trucks, purchasing packing supplies, taking moving insurance, and paying for potential temporary storage. Costs vary based on volume, distance, and whether you choose professional movers or a DIY approach.
- Declutter first: sell or donate unwanted items to lower weight and volume fees.
- Move mid-week: book movers mid-month or mid-week to avoid peak weekend surcharge rates.
- Get multiple quotes: compare at least three removal companies.
- DIY packing: source free boxes and pack items yourself to save on labour.
Home insurance and life cover
Owning a home comes with ongoing insurance costs. Most banks require building insurance before approving your home loan, while home contents insurance protects your belongings. Many buyers also choose life or bond protection cover to help settle the outstanding loan if something unexpected happens.
- Compare insurance quotes: shop around to find the right cover at a competitive price.
- Don't just look at the premium: compare excesses, exclusions, and benefits too.
- Bundle policies where possible: combining cover can sometimes reduce your monthly premiums.
Home set-up costs
Moving into a new property brings immediate, sometimes unavoidable expenses to make it liveable. Beyond the purchase price, you may need to budget for furnishing rooms, handling urgent maintenance or repairs, and adding essential upgrades like security systems, window treatments, or updated fixtures.
- Prioritise the essentials: first focus on critical repairs and security before buying cosmetic items or furniture.
- Buy second-hand where possible: source pre-owned furniture and decor to outfit rooms on a budget.
- Phase in any upgrades required: spread non-urgent home improvements and changes over time to avoid cash flow strain.
Monthly recurring costs
Beyond your bond, homeownership comes with ongoing operational expenses. These include municipal rates, utilities, body corporate or estate levies, home security, landscaping, and ongoing property maintenance.
- Create a realistic monthly budget: include every recurring homeownership expense.
- Build a maintenance fund: save a little each month for future repairs.
- Audit utilities: install energy-efficient lighting and a solar geyser timer to cut monthly electricity bills.
Property costs FAQs
1. Can I buy a house with a R20,000 salary?
Yes, you can. According to Kellaprince Properties’ bond affordability calculator, you can qualify for a home loan of up to R600,973.65. This is the best-case scenario if you meet the lender's affordability requirements and have minimal existing debt. With this amount, you can find properties in areas like Kamagugu and Karino. Saving towards a deposit or pooling finances with a partner or family member can increase your options.
2. Who pays the transfer costs when buying a house?
Although the seller usually appoints the conveyancer, the buyer pays for the transfer costs of the property.
3. How much are lawyer fees when buying a house in South Africa?
These legal fees include bond registration and conveyancing. There isn’t a set amount, and it will depend on the property cost and the attorney in question.
4. How much tax do you pay when buying a house in South Africa?
This is called transfer duty and is calculated on a sliding scale based on the value of the property. If you buy a property valued below R1,210,000, or purchase a new property from a VAT-registered developer where VAT applies, you generally won't pay transfer duty.
5. Are there reduced costs when buying a house with cash?
Yes. Cash buyers avoid bond registration fees and ongoing interest costs, although transfer costs, transfer duty (where applicable), and other buying expenses still apply.
Take the surprise out of buying property
Navigating the homebuying process doesn’t have to be a guessing game. When you partner with a reputable agency like Kellaprince Properties, you get access to dedicated experts who know the fine print inside and out.
One of the advantages of working with an experienced property practitioner is understanding these costs before they become surprises. Having a clear picture from the start allows buyers to budget realistically and move through the transfer process with greater confidence. View our properties for sale and get in touch with us today.
