The deposit is only part of it. On the day you sign, you also pay transfer duty to SARS, the transferring attorney, the attorney who registers your bond, the bank’s initiation fee and the Deeds Office. On a R2 million purchase those costs come to more than R100 000 on top of the deposit.
A R2 million purchase, 20% deposit
| Deposit | R400 000 |
|---|---|
| Transfer duty (SARS) | R33 786 |
| Transfer attorney, incl. VAT | R42 406 |
| Bond registration and initiation fee | R43 568 |
| Deeds Office fees | R3 580 |
| Cash you need | R523 340 |
Transfer duty
Transfer duty is a tax on buying property, paid to SARS through the transferring attorney. It is the same for people, companies and trusts. There is none on the first R1 210 000 of the price; above that it rises in steps, from 3% to 13%. You do not pay it when the seller is a VAT vendor selling a new property — then VAT is in the price instead.
| R1 000 000 | R0 |
|---|---|
| R1 500 000 | R8 700 |
| R2 000 000 | R33 786 |
| R3 000 000 | R107 356 |
Attorneys and the Deeds Office
The transferring attorney is appointed by the seller but paid by you. Their fee follows a guideline tariff from the Law Society, plus VAT, and many attorneys discount it — ask for a written quote. If you take a bond, the bank’s attorney registers it and charges a separate fee, and the bank adds an initiation fee. The Deeds Office charges a fee for registering each deed.
Without a deposit
Some banks lend 100% of the price to buyers with a strong income and credit record. You still need the fees in cash. And a bigger bond makes a rental property much harder to make pay for itself.
| R1 000 000 | R69 666 |
|---|---|
| R1 500 000 | R93 378 |
| R2 000 000 | R128 216 |
| R3 000 000 | R227 506 |