Buying Property in South Africa



As in any other country, research is the first step to buying property in the South Africa. Take time to explore your options, look around and talk to expats who already own homes in the country to find out more. It is best to research online, in books, magazines, and visit property exhibitions and talk to real estate agents before you go to South Africa. When you arrive, take a place on rent while you look around and compare properties.

Despite the fact that the South African property market has been buoyant in recent times, there is no guarantee that the trend will continue. If you are looking for quick returns on your investment then buying into property in South Africa does not make any such promise.

Real Estate market in South Africa

Do not feel pressured to buy property solely based on an agent's advice. Instead, take time to compare properties and prices. Local property owners tend to inflate property prices when foreigners are interested in making a purchase. The best way to find a suitable property is through an estate agent and there are over 36,000 registered agents in South Africa.

The country's largest estate agents include Nationlink  (, Aida (, ERA (, HomenetPam Golding (, Rawson (, REMAX (different website addresses in different regions) and Seeff Property Services ( If you wish to find an agent in a particular town or area take a look at the yellow pages or use the internet.

Agents in South Africa are professional and well organized. They are controlled by the government-established Estate Agency Affairs Board (Tel. 011-880 9994, ) and all agents should be registered with the board. Check to see if the agent you are dealing with displays his license (this is mandatory). You may approach the board in case there is a dispute or complaint about an agent. 

Foreigners are known to use agents in their home country to buy property in South Africa. The fees you pay in this case tend to be higher than the average 7.5 per cent plus Value Added Tax (VAT) usually payable. This cost is borne by the seller. Some sellers charge a fixed amount by way of agent's commission: for instance  R15,000 on properties costing up to R300,000 and up to R65,000 on properties costing up to R2 million. As a rule, the cheaper the property, the higher the fee tends to be as a percentage of the sale while the fees on the most expensive properties fees tend to be relatively negotiable.


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Legal Advice

If you intend to buy property in South Africa, the importance of independent legal advice cannot be overemphasized. Do not sign any documents or make any payment without consulting your lawyer first. The legal fees you pay will be a small price for all the problems that you avoid in the purchase.

Costs Likely To Be Incurred

Begin with signing a preliminary contract, you must first check what fees will be payable and only then sign. Confirm all fees payable in writing. The fees are likely to include:

Transfer Duty is payable on homes that are valued above R140, 000 (£12,173). Duty is levied @ 5% on the value between R140, 000 and R320, 000 (£27,826), and @ 8% on any value over R320, 000.

Legal Fees @ 1 and 2 percent of the purchase price on a sliding scale.

Mortgage Costs: Bank inspection fees @ around 0.2% of the valuation and the mortgage arrangement fee @1 -1.5% of the loan amount.

Utility Fees: cost of supply of water and electricity.

Other Fees such as surveyor's fees, architect's fees and the cost of moving.

Running Costs @ 2- 4% of the cost of a property. These include: property tax, community fees, maintenance costs, caretakers fees and insurance of building and contents.


Once the buyer and seller agree on a price, an agreement of sale is drawn up by the estate agent. Though the terms ‘agreement of sale' and ‘offer to purchase' are often used interchangeably in South Africa, they aren't quite the same. An agreement of sale refers to a written agreement signed by both the buyer and the seller (and also by the seller's spouse if he's married or subject to the laws of a foreign country). On the other hand offer to purchase could be oral or written. If it is written, signed by the buyer and accepted by the seller, an offer to purchase constitutes an agreement of sale which is binding on both parties while an oral offer isn't binding. The agreement of sale contains all details relating to the transaction such as description of the property, the purchase price, particulars of the seller and buyer and so on.

All in all South Africa offers property buyers a number of choices. Buyers however would do well to make an informed choice while investing in real estate here.