Learn SA property
Plain-English guides for buyers, investors, landlords and South Africans abroad. Free for everyone.
Buying your first home
1. Know your budget
Banks usually cap your bond instalment at about 30% of gross income. Check your affordability and pull your free credit report - late accounts cost you a better rate.
2. Get pre-approved
A bond originator applies to several banks at once, free to you, and sellers take a pre-approved buyer more seriously. Many first-time buyers qualify for a 100% bond.
3. Save for the costs, not just the deposit
Transfer duty, attorney and Deeds Office fees are paid in cash. Homes up to R1 210 000 pay no transfer duty. Work out the full amount with the cost of buying calculator.
4. Make an offer (the OTP)
An Offer to Purchase is binding once both sides sign. Make it "subject to bond approval" so you can walk away if finance falls through, and check which compliance certificates the seller will provide.
5. Bond approval and attorneys
Once the bank approves, the seller's transferring attorney and the bank's bond attorney take over. You'll sign documents, provide FICA and pay the costs.
6. Registration - keys!
After lodgement the Deeds Office usually registers within a couple of weeks. The whole process typically takes two to three months from signed offer.
Checklist - tick as you go
Being a landlord
Deposits and inspections (Rental Housing Act)
- Keep the deposit in an interest-bearing account; the interest belongs to the tenant.
- Do a joint inspection when the tenant moves in and when they move out, and keep a signed list of defects.
- Refund the deposit within 7 days if nothing is owed, or 14 days after repairs if deductions are due.
Leases and evictions
- Put the lease in writing. Where the Consumer Protection Act applies, fixed-term leases have notice and cancellation rules - get a compliant template.
- Only a court order can evict a tenant (PIE Act). Never change the locks or cut water or electricity.
- Run a credit and rental-history check before you sign.
Tax
Rental profit is taxable. Bond interest, rates, levies, insurance, repairs and agent fees are deductible; improvements aren't (they add to your base cost for CGT instead). Track it all in the portfolio tracker.
Investing in buy-to-let
Judge a deal on three numbers, all in the deal analyser:
- Monthly cash flow after vacancy, levies, rates, insurance, maintenance, agent fees and the bond. Negative means you top it up.
- Net yield - rent after running costs, as a % of the price. Many SA investors look for around 6% or more.
- Cash-on-cash return - annual cash flow divided by the cash you put in (deposit plus buying costs). Compare it with what that cash would earn elsewhere.
Then stress-test it: what if rates rise 1%, or the unit sits empty for two months?
Moving provinces
Before you fall for the view, compare:
- Schools, hospitals and the commute (or fibre, if you work remotely).
- Municipal service delivery - water, electricity reliability and roads.
- Rates, levies and the cost of living against where you are now.
- Rental demand, in case you need to let the property later.
Compare areas side by side, read the semigration discussions, and consider renting for six months first.
Buying and selling from abroad
- Non-residents can own SA property. SA banks typically lend non-residents a smaller share of the price, so expect a bigger deposit.
- Bring money in through an authorised dealer (your bank) and keep the paperwork - you'll need it to take the proceeds out again when you sell.
- Rental income from SA property is taxed in SA; you may need to register as a taxpayer even if you've emigrated.
- When a non-resident sells for R2 000 000 or more, the buyer must withhold 7.5% of the price for SARS (s35A) - an advance on your CGT, which you can apply to reduce.
- Use the currency switch in the top bar to see amounts in pounds, dollars, euros or Australian dollars (ECB rates, updated daily).
Estimate the tax with the CGT calculator's non-resident option, and ask others in Expats & Non-residents.
Glossary
- Access bond
- A home loan that lets you withdraw extra payments you've made - useful as an emergency fund.
- Body corporate
- The owners of a sectional-title scheme, who manage the common property and set levies.
- Bond originator
- A free service that applies to several banks for you to find the best home-loan rate.
- Bond registration
- Registering the bank's security over your property at the Deeds Office, done by the bank's attorney.
- Compliance certificates
- Electrical (COC), and where applicable gas, electric fence and beetle (entomologist) certificates the seller must usually provide.
- Conveyancer
- An attorney specialising in property transfers. The seller appoints the transferring attorney.
- Deeds Office
- The government office that records ownership of property and bonds.
- Exclusive use area
- Part of the common property (like a garden or parking bay) reserved for one sectional-title owner.
- Levy
- The monthly contribution sectional-title or estate owners pay for maintenance, insurance and security.
- Lodgement
- When the attorneys submit the transfer and bond documents to the Deeds Office.
- Occupational rent
- Rent paid by a buyer who moves in before registration, or a seller who stays on after it.
- Offer to Purchase (OTP)
- The written agreement to buy. Binding once signed by both sides.
- Pre-approval
- A bank's indication of how much it will lend you, before you've found a property.
- Rates and taxes
- The monthly municipal charge based on your property's valuation.
- Rates clearance certificate
- Proof from the municipality that the seller's rates are paid up - needed before transfer.
- Sectional title
- Owning a unit in a complex plus a share of the common property.
- Suspensive condition
- A condition (e.g. bond approval) that must be met by a date for the sale to go ahead.
- Transfer duty
- A tax paid to SARS by the buyer, on a sliding scale by price. Updated automatically on this site.
- Voetstoots
- Sold 'as is'. The seller is still liable for defects they knew about and hid.
- Yield
- Annual rent as a percentage of the price. Gross is before costs, net is after running costs.