Signing an offer to purchase is, for most South Africans, the single most significant financial commitment of their lives. Yet a striking number of buyers arrive at the transfer stage unprepared for what their bank statements are about to absorb. The purchase price on the listing is the starting point of the cost conversation, not the end of it, and the gap between that figure and the true cost of acquisition is wider than most buyers anticipate.
Bradd Bendall, National Head of Sales at BetterBond, South Africa’s largest bond originator, describes this moment of financial reckoning as a pattern the industry encounters repeatedly.
“Affordability is about far more than the monthly repayment,” Bendall says. “The full cost of acquiring a home can exceed the headline price by as much as 8% to 10%, which on a R2-million property translates into an additional payment of between R160,000 and R200,000 that must be funded in cash. We consistently see buyers who have carefully calculated what they can service each month but who have not set aside the once-off transactional costs.”
A further layer of complexity has emerged in the form of 100% home loans, which have become increasingly accessible as lenders compete for quality borrowers. While these bonds, which do not require a deposit, can make homeownership more attainable, they can also create a false sense of financial readiness. Bendall cautions that approval for a 100% bond should not be interpreted as an indication that a buyer has sufficient liquidity to cover the full cost of acquisition. “Banks assess affordability based on income, expenses and credit risk,” he explains, “but the additional cash required for transfer duty, legal fees and other transaction costs remains the buyer’s responsibility. The absence
of a deposit does not eliminate the need for upfront capital.”
The result, he notes, is a closing day shock that can delay registration, strain relationships, and in some cases cause transactions to collapse entirely.
The largest single once-off cost for most buyers is the transfer duty, a tax levied by the South African Revenue Service on the acquisition of immovable property under the Transfer Duty Act 40 of 1949.
Calculated on a sliding scale against the purchase price or market value, whichever is the higher, the duty applies to all property transactions above the current threshold. Following the 2025 Budget, that threshold was revised upward: as of 1 April 2025, no transfer duty is payable on properties valued at or below R1.21 million, offering meaningful relief to entry-level buyers. For properties above this threshold, the duty escalates progressively, starting at 3% on the value between R1.21 million and R1.6 million, and rising to a maximum of 13% on the portion of any purchase price above R13.3 million.
The transfer duty is frequently, and incorrectly, conflated with transfer costs, yet they are distinct obligations flowing to entirely different recipients. Bendall is clear on the distinction: “Transfer costs are the professional fees paid to the conveyancing attorney appointed to register ownership of the property in the buyer’s name,” he explains. “These are not a tax; they are a professional service fee determined by tariffs recommended by the Legal Practice Council, scaled according to the purchase price. The buyer pays these costs even though the attorney acts on behalf of the seller throughout the transfer process.”
The third significant cost line, and arguably the most routinely overlooked, follows the same principle.
“Where a buyer requires finance, a second set of attorneys, entirely separate from the conveyancers, is appointed by the bank to register the home loan at the Deeds Office, and they charge a separate legal fee based on the bond amount being registered,” Bendall continues. “Buyers are often genuinely surprised to learn that they will receive two separate sets of legal accounts. The conveyancer and the bond attorney are independent practitioners, and both invoices must be settled before the transaction can proceed to registration.”
Beyond these three headline items, a cluster of smaller but by no means negligible disbursements further erodes the buyer’s cash reserves. Deeds Office tracking fees, post and petties charged by conveyancing firms for administrative overheads, and the cost of obtaining rates clearance certificates from the relevant municipality collectively add several thousands of rands to the settlement statement.
In sectional title schemes, a pro-rata levy contribution covering the period between occupation and registration can represent a meaningful additional sum depending on where in the levies cycle transfer falls. Once the keys are handed over, the ongoing cost obligations of ownership begin in earnest: banks require homeowners’ insurance as a standard bond condition, body corporate levies become a fixed monthly line item in sectional title schemes, and most lenders insist on life cover to ensure the outstanding balance is settled in the event of the bondholder’s death. These are not optional extras but structural components of the full cost of ownership that must be factored into the affordability calculation before, not after, committing to a purchase price.
Bendall’s advice to buyers navigating this complexity is straightforward: start with the numbers well before starting with the listings. He says that running scenarios across different purchase prices, deposit levels and interest rate environments through an online bond calculator like BetterBond’s affordability calculator, allows buyers to establish a realistic ceiling that already accounts for the full cost of acquisition, not just the monthly instalment, before a single viewing is booked.
Bendall is equally emphatic that a formal pre-approval certificate serves a parallel and important function.
“A pre-approval certificate does not simply tell a buyer what the bank is prepared to lend,” he explains. “It gives them a verified ceiling. The intelligent use of that ceiling is to subtract the anticipated once-off costs from the figure before beginning to house hunt, so that buyers are searching in a price range that leaves genuine cash headroom.”
BetterBond data shows that 95% of clients who obtain formal pre-approval through the originator go on to achieve bond approval, a conversion rate Bendall attributes in large part to the financial preparation the pre-approval process enforces.
The interest rate environment adds a further dimension to this planning exercise. South Africa’s prime lending rate currently stands at 10.25%, following six consecutive cuts by the South African Reserve Bank since September 2024, representing a cumulative reduction of 150 basis points from the 11.75% peak that prevailed for most of 2024. While the rate-cutting cycle has improved affordability, the Reserve Bank’s January 2026 decision to hold rates unchanged is a reminder that the direction of monetary policy is not guaranteed.
“The buyers who are best placed to weather future market fluctuations are those who have built a genuine buffer into their budgets from the outset,” Bendall says. “If you have accounted properly for the once-off acquisition costs, you are not starting your ownership journey already financially stretched. That buffer is what gives you the resilience to absorb rate movements or unexpected maintenance costs without being pushed into difficulty.”
The message from Bendall is clear: the purchase price is just the beginning of the cost conversation when preparing to buy property. Buyers who invest time in understanding the total cost of acquisition before beginning their property search are not only better prepared for closing day but are making a more durable financial decision that accounts for the realities of owning a home.
