Buying a Property? Don’t Forget About Transfer and Bond Costs

Buying a home is a major financial commitment, but the purchase price is not the only amount you need to consider.
When purchasing property in South Africa, there may be additional costs associated with transferring the property into your name and, if you are financing the purchase with a home loan, registering the mortgage bond.
Understanding these costs before signing an Offer to Purchase can help you budget more accurately and avoid unwelcome surprises during the transfer process.

What are property transfer costs?

Transfer costs are the costs associated with transferring ownership of a property from the seller to the purchaser.
Depending on the transaction, these can include:

• transfer duty payable to SARS;
• the transferring attorney’s professional fees;
• Deeds Office fees; and
• other necessary charges and disbursements associated with the transfer.

These costs are separate from the purchase price of the property.

What is transfer duty?

Transfer duty is a tax payable to SARS when property is acquired, unless an exemption applies.
For property transactions subject to transfer duty, the rates applicable from 1 April 2026 are:

• R1 to R1,210,000: 0%
• R1,210,001 to R1,663,800: 3% of the value above R1,210,000
• R1,663,801 to R2,329,300: R13,614 plus 6% of the value above R1,663,800
• R2,329,301 to R2,994,800: R53,544 plus 8% of the value above R2,329,300
• R2,994,801 to R13,310,000: R106,784 plus 11% of the value above R2,994,800
• R13,310,001 and above: R1,241,456 plus 13% of the value above R13,310,000.

This means that a property valued at R1,210,000 or less currently attracts no transfer duty. However, that does not mean there are no transfer costs. Conveyancing and other costs may still be payable.

Transfer duty is also generally not payable where the property transaction is subject to VAT, for example in certain sales by VAT-registered property developers. The tax treatment depends on the particular transaction.

Who pays transfer duty?

In an ordinary property purchase, the purchaser is responsible for the transfer duty.
The transfer duty process is dealt with through SARS, generally by the conveyancer handling the transfer.

What are conveyancing fees?

Property cannot simply be handed from one owner to another once the purchase price has been paid.
The transfer must be formally registered in the Deeds Office.
A conveyancer attends to the legal transfer process, which includes preparing the necessary transfer documentation and attending to the requirements for registration.
The purchaser will ordinarily be responsible for the transferring attorney’s fees and associated transfer costs.

What if you’re buying with a home loan?

If you are financing the property through a home loan, there is another process to consider: registration of the mortgage bond.
The bank appoints a bond attorney to register the mortgage bond over the property as security for the loan.
Bond registration costs are separate from the costs of transferring ownership of the property.
This means a purchaser using a home loan may have to budget for both:

• property transfer costs, and
• bond registration costs.

The transferring attorney and bond attorney may be different firms, although in some transactions the same firm may attend to both aspects.

What about your deposit?

A deposit should not be confused with transfer and bond costs.
If a deposit is required under the Offer to Purchase, it forms part of the funding of the purchase price.
Transfer duty, conveyancing costs and bond registration costs are additional expenses and should be budgeted for separately unless your particular financing arrangement expressly provides otherwise.

Budget before you make an offer

Before committing to a property purchase, it is sensible to establish both:

1. what you can afford to pay for the property; and
2. what additional cash you will need for the transfer and, where applicable, bond registration.

The exact amount will depend on factors including the purchase price, the value of the property, the amount of the home loan and the particular transaction.
Getting an estimate of these costs before signing an Offer to Purchase can help you make a more informed decision.

Buying or selling property?

DMF Attorneys’ conveyancing team assists with property transfers, mortgage bonds and a range of other property-related matters.
If you are buying or selling property, obtaining legal guidance early in the process can help you understand the transaction, the costs involved and the steps required to complete the transfer.

Contact DMF Attorneys for assistance with your property transaction.