Are You A First Time Property Buyer? | Let's Discuss The Hidden Costs #PropertywithLeonard

Are you a First-time Home Buyer? The cost of buying a house in South Africa can be overwhelming but fortunately, you can get a head start on your budget by taking advantage of the information I will share with you today. Once you know and understand all the different fees involved with the sale of a property, you'll have a much better grasp of the home buying process.
#timestamps
0:00 Intro
1:41 Deposit
3:54 Deeds Office Registry Fee
4:36 Transfer Duty
4:58 Conveyancer’s Fee
5:07 Sundries / Postage and Petties
5:42 Home Loan Initiation Fee
6:02 Administration Fee
6:26 Homeowner's Insurance
7:08 Home Loan Protection Insurance
7:47 Municipal Provision for Rates and Taxes
7:53 Moving Costs
7:55 Connection charges

What is the cost of buying a house in South Africa?
1. Deposit
A deposit is an initial payment you make to secure the purchase of your property. Your deposit is not meant to cover the extra costs involved in purchasing a property such as bond fees, transfer duty, attorney costs. Often banks require more than 10 % deposit based on affordability. It's advisable to try and pay in as much as possible since the bigger the deposit, the smaller the home loan repayment will be.
It is paid as an upfront fee to the transferring attorneys. They will keep the deposit in an interest-bearing trust account until the day your bond is registered and the property is transferred into your name.
The interest accrued on this amount while being in the trust account is paid back to you.
2. Deeds Office Registry Fee
This fee is charged by the Deeds Office for the legal registration of your mortgage bond. This is a fixed amount calculated on the value of your home loan.
3. Transfer Duty
Transfer duty is a government tax charged on property that is transferred from the seller's name into the buyer's name. It generally constitutes the major portion of the costs involved. If the seller is registered as a VAT vendor, no transfer duty is payable. In such a case, the seller must have included VAT in the purchase price. This is usually the case when buying a property in a new development – the developer is generally VAT registered.
4. Conveyancer’s Fee
Transferring conveyancer's fees are paid for the service the transferring attorneys provide to transfer ownership of a property and to get the property registered in your name. The amount varies according to the purchase price of the property. The fee is based on tariffs recommended by the Law Society but may differ slightly from one law firm to another. Attorney’s Fees are always subject to VAT being added. Conveyance fees are due before the transfer of the property and must be paid directly to the transferring attorneys.
5. Sundries / Postage and Petties
The transferring attorneys charge a fee to cover small things like posting documents to other conveyancers, the bank, the estate agent, the Deeds Office, and to you. The amount is usually fixed and each law firm has its own rates, Attorney fees are always subject to VAT being added.
5. Deeds Office Registry Fee
This fee is charged by the Deeds Office for the title deed, legal transfer and registration of the property home into your name. It is a fixed amount based on the value of your home loan. For example, on a bond under R 100 000.00 and below the fee can be R 35.00.
6. Home Loan Initiation Fee
A home loan initiation fee is charged by the bank for processing of the home loan application.
7. Administration Fee
An administration fee is charged by the bank for administering the home loan account. The service fee may be reduced if you make use of the bank’s insurance. The amount will most likely be debited to your home loan account.
8. Homeowner's Insurance
The bank will insist that you take out a homeowner's insurance policy to cover the property and the permanent structures on it against natural disasters such as fire or storm damage. The amount will vary depending on the value of your property and will likely be debited to your home loan account by the insurance company.
9. Home Loan Protection Insurance
If you don't already have a life assurance policy to cede as security, you need to take out home loan protection assurance against death only, disability only, retrenchment only, death and disability, death and retrenchment, disability and retrenchment, or death, disability & retrenchment.
The amount depends on the outstanding balance of your home loan and will most likely be debited from your home loan account.
10. Municipal Provision for Rates and Taxes

11. Moving Costs
12. Connection charges
Telephone, Internet, Alarm monitoring

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