How to Buy a House in South Africa: A Step-by-Step Process

Buying a home in South Africa involves distinct phases, each requiring careful attention. This guide clarifies the various stages, helping buyers navigate the process with confidence towards owning a home.

Financial Planning and Bond Application

Buying a home in South Africa involves financial commitments beyond the purchase price. Buyers face additional upfront costs, including transfer duty, conveyancing fees, bond registration fees, and Deeds Office fees, which impact the overall budget.

Transfer duty is a tax levied by the South African Revenue Service (SARS) on property transfer. As of April 1, 2025, properties up to R1,210,000 are exempt. For higher values, a progressive scale applies; for example, properties between R1,210,001 and R1,663,800 incur a 3% duty on the value above R1,210,000.

Conveyancing fees are professional charges paid to the transferring attorney for legal services. Regulated by the Legal Practice Council, these fees generally increase with property value. As of August 1, 2025, fees might range from R6,640 for a property under R100,000 to R66,370 for a R5 million property, excluding VAT.

If a home loan is secured, bond registration fees are paid to the bond attorney for registering the mortgage bond. These fees differ from conveyancing fees and vary by loan amount. A bank initiation fee and a valuation fee for the property assessment may also apply.

Deeds Office fees are government charges for officially registering property and bond documents. These fees are subject to annual adjustments and are based on the property’s value.

Calculating affordability is a foundational step, assessing income, existing debt, and living expenses to determine a realistic bond amount. Lenders evaluate debt-to-income ratio and credit score to gauge repayment capacity. A credit score above 600 generally improves loan approval chances.

Gathering necessary documentation is a preparatory task for a bond application. Required documents include:
Latest payslips (three months, or six months if income is variable) and three months of personal bank statements for employed individuals.
For self-employed applicants: a letter of drawings from an accountant, six consecutive months of personal and business bank statements, and two years of annual financial statements (management accounts not older than two months if financial statements are older than six months).
A certified copy of a South African ID or valid passport.
Proof of residence.
A completed and signed home loan application form.
Supporting statements or agreements for additional income (e.g., rental or investment income).
The signed Offer to Purchase.

Home loan applications can be initiated directly with banks or through a bond originator. Originators submit a single application to multiple banks to secure favorable rates and terms. This service is typically free to the buyer. Pre-approval indicates the amount a bank will lend, strengthening a buyer’s offer.

Finding Your Property and Making an Offer

Locating a suitable property often involves engaging with estate agents. They connect buyers with properties aligning with their requirements and budget, facilitating viewings and providing market insights.

Buyers search for properties through online portals, show houses, and estate agent listings. This helps identify options across different areas and property types. Common types include freehold (full ownership of land and buildings) and sectional title (ownership of a unit within a complex with shared common property).

Once a property is identified, an Offer to Purchase (OTP) document initiates the formal offer. This legally binding contract outlines sale terms, specifying the purchase price, parties, and property description.

The OTP includes suspensive conditions that must be met for the sale to proceed. Common conditions include buyer bond approval within a timeframe or a satisfactory home inspection, allowing negotiation or withdrawal if issues are found.

Negotiations occur until buyer and seller agree on all terms, including purchase price and other conditions. The OTP also details the occupation date (when the buyer takes physical possession) and may include occupational rent provisions if occupation occurs before transfer.

Offer acceptance signifies a binding agreement. The OTP becomes a legally enforceable contract, initiating subsequent legal and administrative procedures for property transfer. A deposit may be requested but is not always a legal requirement.

The Property Transfer Process

Following the acceptance of an Offer to Purchase and bond approval, the property transfer process formally begins, overseen by conveyancing attorneys. South African property law requires that only an admitted conveyancer, a specialized attorney, can register property transactions at the Deeds Office. This process involves distinct legal roles: the transferring attorney, the bond attorney, and, if applicable, the cancellation attorney.

The transferring attorney, appointed by the seller but paid by the buyer, handles the legal transfer of property. Their duties include drafting documents, corresponding with parties, and ensuring legal compliance. The bond attorney, appointed by the bank, registers the mortgage bond. If the seller has an existing bond, a cancellation attorney cancels it upon transfer.

Once the Offer to Purchase is firm and financing secured, the transferring attorney prepares transfer documents, including the Power of Attorney to Pass Transfer. Both buyer and seller sign various documents, such as the deed of sale and bond documents, often at the conveyancer’s office.

At this stage, the transferring attorney facilitates payment of transfer duty to SARS. Other legal fees, including conveyancing and bond registration fees, are also collected by the attorneys for payment to relevant authorities and service providers.

Once documents are signed and payments made, the conveyancing attorney lodges the deeds at the Deeds Office. If a bond is registered and another cancelled, deeds are lodged simultaneously for smooth ownership transition. The Deeds Office assigns a barcode for tracking progress.

The Deeds Office examination involves multiple reviews for accuracy and legal compliance. Examiners scrutinize documents for restrictions or errors. This phase typically takes 7 to 10 working days if no issues arise. Rejected deeds are returned for correction, restarting the process.

After successful examination, deeds proceed to preparation, execution, and official registration. The conveyancing attorney executes deeds before the Registrar of Deeds, who signs and stamps them. The property is then legally registered in the new owner’s name. Attorneys provide status updates throughout.

Taking Occupation and Post-Transfer Administration

After legal registration at the Deeds Office, the final phase involves taking occupation and managing post-transfer administration. This stage includes practical steps for a smooth transition into the new home.

Physical occupation typically occurs on the date agreed in the Offer to Purchase. The buyer receives keys and conducts a final inspection to confirm the property’s condition and that agreed repairs or conditions are met.

A primary administrative task is transferring utility accounts (electricity, water) into the new owner’s name with the local municipality. For freehold properties, the new owner typically visits a municipal walk-in center. It is advisable to wait approximately six weeks after transfer registration, as the Deeds Office notifies the City Council of ownership change.

Registering for municipal rates and taxes is important. While the Deeds Office notifies the municipality of ownership change, the new owner ensures accounts are correctly established. For sectional title units, the body corporate often manages water and electricity, with rates accounts typically opened automatically.

Homeowner’s insurance is required for most home loan agreements, including building insurance to protect the property structure. While content insurance is not always mandatory, it is prudent to secure it for personal belongings. The policy must be in place before transfer registration, as ownership risks transfer to the new owner then.

Other administrative tasks include informing the postal service of the new address and setting up internet and other desired services. These actions help establish the new home as fully functional and connected.