Discover practical tips from RE/MAX of Southern Africa on how to effectively plan and save for transfer and bond registration fees when purchasing a home in South Africa.
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One of the major expenses beyond the purchase price of a home is transfer costs and bond registration fees. It can take time to save up enough to cover these upfront costs, so the sooner buyers start thinking about this, the better.
“Buying a home is a significant financial commitment, and many first-time buyers often overlook the additional costs involved in the process. Understanding these costs and planning for them in advance can help you avoid financial strain when it comes time to finalise your property purchase,” advises Adrian Goslett, Regional Director and CEO of RE/MAX of Southern Africa.
He explains that when purchasing a property, buyers are responsible for covering the transfer duty (if applicable), conveyancing fees, and bond registration costs. These costs vary based on the purchase price of the property and the size of the home loan.
For example, if you are purchasing a home for R1.5 million, the estimated costs are as follows:
Transfer duty: R 12 000
Property transfer costs: R 35 392
Transfer deeds office fees: R 1 544
Post, petties FICA, other fees: R 2 000
Total transfer costs: R 50 936
Bond registration cost: R 35 392
Bond deeds office fees: R 1 544
Post, petties FICA, other fees: R 2 000
Total bond costs: R 38 936
Total additional costs: ±R 89 872
These costs need to be paid upfront and typically cannot be included in your home loan. If you do not have enough savings to cover these costs, you might have to consider a personal loan or bridging finance options.
“Financing these costs will carry additional interest charges and will require monthly instalments in addition to the home loan repayments. For these reasons, it is far better to cover these costs from savings rather than debt,” Goslett suggests.
To help buyers create a plan for how to cover these costs in cash, RE/MAX of Southern Africa shares the below tips:
“Being financially prepared for transfer fees ensures a smooth and stress-free property-purchase process. By understanding the costs involved and implementing a dedicated savings plan, you can confidently take the next step towards homeownership without unexpected financial strain. Start saving today so that when the time comes, you’ll be ready to secure your dream home with ease,” Goslett concludes.
PERSONAL FINANCE