The real cost of buying a R2million home

Private Property South Africa

It is no secret that buying a home is one of the biggest financial commitments you will ever make in your life, but along with the costs of the physical home there various other fees and charges to keep in mind too.

Buying a home for the first time? Here's a step by step guide for first time home buyers

Steve van Wyk, Seeff’s MD in Centurion, lists the following main costs of buying a home of R2 million:

Purchase price: R2 million

10 % deposit: R200, 000

Transfer duty to SARS: R60,500

Calculate your transfer duty here

Conveyancer fees: R25,380

Postages and petties: R977,50

Deeds office transfer levy: R1,098

Electronic document generation fee: R747,50

Deeds office search fee: R241,50

Local council rate clearance: R345

Bank and bond costs on R1 800 000

Deeds office levy fee: R1,098

Initiation fee: R5,250

Attorney bond and registration cost: R23,910

Postages and petties and VAT: R977,50

Electronic generation fee: R1,092

Another small cost to bear in mind is an electricity connection fee of around R600 to R1,200

Water connection Fee: R470

Also keep in mind that VAT needs to be added to the above amounts.

Monthly expenses that need to be budgeted for include:

  • Monthly repayments of the bond. At the current interest rate the monthly repayment of a bond of R1.8 million will be around R17,670
  • Bond monthly admin service fee: R69
  • Home owners insurance: Banks usually add this to the mortgage amount to protect themselves against claims for flood, fire and hail damage.
  • Insurance on the owner’s life. This is to cover the cost of the property in case of death. The policy will not only cover the outstanding loan amount to the bank, but will also ensure that any dependants have a roof over their head at the time of death.
  • Rates and taxes: due to the municipality for rubbish removal and the maintenance of your area.
  • Water and electricity: due to the municipality for your household’s monthly consumption.

Van Wyk concludes that any prospective home buyers should carefully look at their budget and expenses before considering the big step of purchasing property.

“A realistic budget is extremely important before embarking on this journey.”

Read more: House hunting tips for 2019


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