Bond Costs vs Transfer Costs: Complete Comparison 2025

Understanding the difference between bond costs and transfer costs is essential for accurate property budgeting in South Africa.

The Key Difference

Transfer Costs: Expenses to legally transfer property ownership from seller to buyer. Always paid by buyer.

Bond Costs: Expenses to register a mortgage bond when financing your purchase. Only if taking a home loan.

Transfer Costs Breakdown

1. Transfer Duty (Tax to SARS)

2025 Rates:

• R0 - R1,100,000: 0% (exempt)
• R1,100,001 - R1,512,500: 3% on amount above R1.1m
• R1,512,501 - R2,117,500: 3-6% progressive
• R2,117,501 - R2,722,500: 3-8% progressive
• Above R2,722,501: Up to 13% on highest bracket

Examples:

• R900,000 property: R0 transfer duty
• R1,300,000 property: R6,000 transfer duty
• R2,000,000 property: R41,625 transfer duty
• R3,000,000 property: R119,275 transfer duty

2. Conveyancing Attorney Fees

2025 Guide:

• R500,000 property: R9,000 - R13,000 (incl VAT)
• R1,000,000 property: R14,000 - R20,000 (incl VAT)
• R2,000,000 property: R21,000 - R28,000 (incl VAT)
• R3,000,000+: R28,000+ (incl VAT)

3. Additional Transfer Costs

• Rates clearance: R1,500 - R2,500
• Electrical compliance: R800 - R1,500
• Plumbing compliance: R800 - R1,200
• Beetle certificate: R800 - R1,500
• Deeds Office fees: R450 - R800
  Total additional: R5,000 - R9,000

Bond Costs Breakdown

1. Bond Registration Fees

Based on loan amount:

• R500,000 bond: R5,000 - R8,000 (incl VAT)
• R1,000,000 bond: R8,000 - R11,500 (incl VAT)
• R2,000,000 bond: R12,000 - R17,000 (incl VAT)

2. Bank Initiation Fees

• Standard fee: R5,000 - R6,500
• Fixed regardless of bond amount
• Once-off payment

3. Valuation Fees

• Standard properties: R3,000 - R5,000
• Sectional title: R3,500 - R5,500
• Larger properties: R6,000+

Total Bond Costs: R15,000 - R35,000 depending on bond amount

Cost Comparison Examples

Example 1: R1,000,000 Property (100% Bond)

Transfer Costs:

• Transfer duty: R0 (exempt)
• Attorney: R15,000
• Certificates: R6,000
• Deeds Office: R600
  Total Transfer: R21,600

Bond Costs:

• Registration: R9,500
• Initiation: R5,750
• Valuation: R4,000
  Total Bond: R19,250

GRAND TOTAL: R40,850

Example 2: R2,000,000 Property (80% Bond)

Transfer Costs:

• Transfer duty: R41,625
• Attorney: R23,000
• Certificates: R7,000
• Deeds Office: R700
  Total Transfer: R72,325

Bond Costs (R1.6m):

• Registration: R13,500
• Initiation: R6,000
• Valuation: R4,500
  Total Bond: R24,000

Deposit Required: R400,000
GRAND TOTAL: R496,325

Example 3: R1,000,000 Cash Purchase

Transfer Costs Only:

• Transfer duty: R0
• Attorney: R15,000
• Certificates: R6,000
• Deeds Office: R600
  Total: R21,600

Bond Costs: R0
SAVES: R19,250 vs financed purchase

Who Pays What?

Buyer Pays:

• ALL transfer costs
• ALL bond costs (if financing)
• All certificates
• Transfer duty

Seller Pays:

• Estate agent commission (5-7% + VAT)
• Bond cancellation (if applicable)
• Rates shortfall (if any)

Ways to Reduce Costs

Transfer Costs:

• Buy under R1.1m (zero transfer duty)
• Shop around for attorneys (get 3-5 quotes)
• Use same attorney for transfer and bond (10-15% discount)
• Provide documents promptly

Bond Costs:

• Larger deposit = lower bond = lower costs
• Negotiate initiation fees
• Shop multiple banks
• Good credit score helps

Frequently Asked Questions

Q: Can I include these costs in my bond?
A: Usually no. Most banks require separate payment, though 105% bonds exist in special cases.

Q: Do I pay VAT on everything?
A: VAT applies to attorney fees, not transfer duty or most Deeds Office fees.

Q: Can the seller pay some costs?
A: Negotiable but uncommon. Buyers typically pay all.

Q: How much should I budget?
A: Budget 4-6% of property value for total costs.

Conclusion

Transfer costs are unavoidable for all buyers. Bond costs only apply when financing. Cash buyers save significantly.

Key Takeaways:

• Transfer costs: Always apply (R15k - R150k+)
• Bond costs: Only if financing (R15k - R35k)
• Budget 10-15% extra as contingency
• Shop around for best rates
• Start process early

For calculators, see our Property Transfer Cost Calculator and Bond Cost Calculator tools.