What does buying your first home really cost upfront?

The purchase price is only part of what a first home costs on day one. On top of it sit up to five separate once-off bills: transfer duty (a government tax — nothing is payable on homes up to R1,210,000 under the current SARS table), the transferring attorney’s fee, the bond attorney’s fee, the bank’s bond initiation fee, and the deposit — plus smaller move-in items like rates or levy clearance and the insurance a bank requires.

On an R1,500,000 first home with a 10% deposit, the costs alone come to roughly R90,000 — about 6% of the price — before the R150,000 deposit. The all-in cash needed at settlement is around R240,000, not R150,000. Below, each cost, how it is worked out, and where the number comes from.

The price on the listing is not the price on the day

A property purchase settles through attorneys, the deeds office, SARS and the bank — and each layer has its own bill. Almost none of it can be added to the bond: the loan covers the property, while the costs are cash you bring.

This is a different question from what the loan itself costs over twenty years — that is the ground the home-loan article covers. Here the focus is the once-off bill to get the keys.

Transfer duty — the tax on changing ownership

Transfer duty is a once-off tax paid to SARS by the buyer before the deeds office will register the transfer. It runs on a sliding scale set by the property’s value, and nothing is payable up to R1,210,000 — which covers a large share of genuine first homes.

The scale climbs from there. On the current SARS table:

Up to R1,210,000 — no duty.
R1,500,000 — 3% of the R290,000 above the threshold = R8,700.
R2,000,000 — R13,614 + 6% of the R336,200 above R1,663,800 = R33,786.

One important swap: a newly built home bought from a VAT-registered developer carries 15% VAT inside its advertised price instead of transfer duty. A purchase attracts one or the other, never both — which is why new-build adverts often say “no transfer duty”. That is this rule at work, not a discount.

The transferring attorney and the deeds office

The seller appoints the transferring attorney, but the buyer pays. The fee scales with the price along an attorneys’ guideline — a guideline, not a fixed tariff, so firms quote around it. On an R1,500,000 purchase it works out to roughly R37,000 including VAT, plus a few thousand rand of disbursements (deeds searches, FICA checks, postage).

On top sits the deeds office’s own registration fee — a gazetted sliding scale, around R1,700 for a home in this price range.

Bond costs — a second attorney and the bank’s fee

If there is a home loan, a separate bond attorney — appointed by the bank, again paid by the buyer — handles the bond registration at the deeds office. The fee follows the same guideline shape against the bond amount: on a bond near R1,350,000, roughly R35,000 including VAT, plus about R1,700 for the deeds office’s bond fee.

The bank also charges a once-off bond initiation fee, capped by the National Credit Act at around R6,000 including VAT, which most banks charge at or near the cap. Some add it to the loan, where it then accrues interest over the term.

A cash purchase skips this whole section — the trade-off the numbers make visible.

The deposit

The deposit is not a fee — it is the part of the price the bank does not lend. Banks price the loan off the loan-to-value ratio, so around 10% is a common ask, and a larger deposit usually earns a lower interest rate.

100% bonds exist and are common for first-time buyers, and some banks offer products above 100% aimed at covering costs — the data point being that these carry higher rates and more interest over the life of the loan.

The move-in layer

Rates clearance: the municipality will not allow transfer until rates are cleared. The seller settles the clearance itself, but buyers typically pre-pay a few months of rates and utilities on a pro-rata basis at handover.
Levy clearance (sectional title): the same mechanism through the body corporate, often with a levy deposit or pro-rata levies.
Occupational rent: if you move in before registration, the offer to purchase sets a monthly amount.
Home (buildings) insurance: a bank condition on a freehold bond from day one. In sectional title the building is insured through the levy, so only contents cover sits with the owner.
Moving, connections and small repairs — real, if unpriced.

The all-in number — one worked example

An R1,500,000 freehold first home, 10% deposit, roughly R1,350,000 bond, before any move-in costs:

Deposit — R150,000
Transfer duty — R8,700
Transferring attorney (guideline, incl VAT) — about R37,000
Deeds office, transfer — about R1,700
Bond attorney (guideline, incl VAT) — about R35,000
Deeds office, bond — about R1,700
Bond initiation fee — about R6,000
Total cash before move-in costs — around R240,000, of which roughly R90,000 is costs on top of the deposit.

At R1,200,000 the duty line falls to R0 and the attorney scales drop a band, so costs land nearer R75,000. The pattern holds across this price range: the extra costs run roughly 5–7% of the price, on top of whatever deposit the bank asks for.

Terms used on this page

transfer duty: A once-off tax paid to SARS when property changes hands, on a sliding scale set by the value of the property. Below the current threshold, nothing is payable.
deeds office: The government registry where property ownership and bonds are officially recorded. Registration there is the moment the home legally becomes yours.
conveyancer (transferring attorney): The specialist attorney who moves ownership of a property from seller to buyer at the deeds office. Chosen by the seller, but paid by the buyer.
bond registration: Recording the bank's home loan against the property at the deeds office, handled by a separate bond attorney the bank appoints and the buyer pays.
bond initiation fee: A once-off fee the bank charges to set up a home loan. It is capped by the National Credit Act, and most banks charge at or near the cap.
deposit: The part of the purchase price a buyer pays in cash rather than borrowing. The bank lends the rest, and a larger deposit usually buys a lower interest rate.
rates clearance certificate: A municipal certificate confirming a property's rates are paid up. The deeds office will not register a transfer without it.
levy (sectional title): The monthly amount owners in a sectional-title complex pay the body corporate for shared costs like building insurance, maintenance and common areas.

Sources

SARS — Transfer Duty

Reviewed July 2026

Back to the Library