Transfer Duty, Buying Costs and Capital Gains Tax on SA Property (2026)
What it really costs to buy and later sell South African property in 2026 — transfer duty, conveyancing, CGT and agent commission, worked end to end.
Published 2026-06-01 · Updated 2026-06-29
The price on the listing is not the price you pay
When you buy a home in South Africa, the advertised price is the floor, not the ceiling. On top of it you pay transfer duty to SARS, a conveyancing (transfer) attorney to move the title into your name, and — if you take a home loan — a separate bond registration attorney to register the bank's mortgage. None of these are negotiable away. They are the price of legally owning the property.
The site's engine models the full acquisition cost at roughly 3.5% to 4.5% of the purchase price, and that range holds up well in practice. The bigger the home, the closer you sit to the top of that range, because transfer duty is progressive: the marginal rate climbs as the price rises. On a R2.5m home you are looking at somewhere in the region of R90,000 to R110,000 of pure transaction cost before you have bought a single light bulb. That money is gone the moment you sign — it buys you nothing you can sell later.
This matters because almost every casual rent-vs-buy comparison ignores it. People compare a monthly bond repayment to a monthly rent and stop there. But buying carries a large one-off entry cost, and — as we will see — an even larger one-off exit cost. Spread those over a short holding period and they can swamp every other number in the decision.
Transfer duty: the progressive entry tax
Transfer duty is a tax on the transfer of property, paid by the buyer and calculated on a sliding scale. The first slice of value — currently up to roughly R1.1m — is taxed at 0%. Above that, the rate steps up through a series of bands, and the most expensive homes attract a top marginal rate of 13% on the portion of the price in the highest band. Because it is marginal, you do not pay one flat rate on the whole price; you pay 0% on the bottom slice, then progressively higher rates on each slice above.
The practical effect is that transfer duty is trivial on entry-level homes and substantial on family homes in metros like Cape Town. A property under about R1.1m pays no transfer duty at all, which is a real reason first-time buyers at that price point face a much lower cost-to-buy than the 3.5–4.5% rule of thumb suggests. Push the price to R2.5m and transfer duty alone runs into the tens of thousands of rands.
One nuance worth knowing: transfer duty applies to second-hand property bought from a non-VAT-registered seller. If you buy a brand-new home directly from a VAT-registered developer, the price usually includes VAT instead of attracting transfer duty — you do not pay both. For most ordinary resale purchases, though, transfer duty is the line item that matters.
Conveyancing and bond costs: the rest of the entry bill
Beyond duty, you pay the transfer attorney's fee on a regulated tariff that scales with the purchase price, plus disbursements: Deeds Office registration fees, deed search and document costs, FICA and admin charges, and usually a pro-rata share of rates and levies the seller has prepaid. These are unavoidable and are paid before the property registers in your name.
If you are financing the purchase, the bank instructs a separate bond registration attorney to register the mortgage bond, and you pay that attorney too — again on a price-linked tariff with its own disbursements. So a bonded buyer effectively pays two sets of legal fees: one to transfer the property, one to register the loan. A cash buyer skips the bond costs entirely, which is a quiet saving of tens of thousands of rands that cash buyers often forget to credit themselves.
Add transfer duty, transfer attorney fees and bond registration together and you land squarely in that 3.5–4.5% of price band on a typical R2.5m bonded purchase. Some developers and banks run promotions that absorb part of this — no transfer duty on new builds, or a bond cost subsidy — and those promos can shift the maths enough to change which home is the better buy. Always price the deal in front of you, not the generic rule.
The exit bill: CGT and agent commission when you sell
Selling costs more than buying, and the two biggest items are estate-agent commission and Capital Gains Tax. Agent commission is typically 5% to 7.5% plus VAT of the sale price. On a R3.5m sale at 6% plus 15% VAT, that is R241,500 paid to the agent — a number that dwarfs your original transfer duty. Commission is negotiable, and on higher-value homes shaving even one percentage point saves real money, but you will rarely sell at no cost.
Capital Gains Tax applies to the profit on sale. For an individual, 40% of the capital gain is included in your taxable income and taxed at your marginal rate, so the maximum effective CGT rate is 18% (45% × 40%). You also get an annual capital gains exclusion of R40,000, and — crucially for a home you live in — a primary-residence exclusion that wipes out the first R2,000,000 of capital gain entirely. The gain is the selling price minus your base cost: the original purchase price, plus the transfer duty and attorney fees you paid on entry, plus qualifying improvements, plus the selling costs including that agent commission.
Notice how the entry costs come back to help you here: because transfer duty and conveyancing fees are added to base cost, they reduce the eventual capital gain and therefore the CGT. They are not refunded — they simply lower the profit SARS taxes. For a primary residence with a gain under R2m, the R2,000,000 exclusion usually means no CGT at all. CGT bites hardest on investment properties, second homes and big gains on expensive primary homes, where the gain runs past R2m.
Worked example: a R2.5m Cape Town home, bought then sold
You buy a R2.5m home in Cape Town with a bond. Entry costs at roughly 4% of price come to about R100,000 — transfer duty in the region of R50,000–R60,000, transfer attorney fees and disbursements, and bond registration costs. Your true all-in cost to own the property is about R2.6m, not R2.5m. That extra R100,000 is your buried entry cost, and it has to be earned back through appreciation before you are even.
Hold it for several years at the site's default 5% per year appreciation and say it grows to R3.5m. You sell through an agent at 6% plus VAT: R241,500 in commission. Your capital gain is the R3.5m sale price minus your base cost. Base cost is the R2.5m purchase price, plus the roughly R100,000 in entry costs, plus the R241,500 selling commission — about R2,841,500. That puts the raw gain at roughly R658,500. Because this is your primary residence, the R2,000,000 primary-residence exclusion swallows the entire gain, so your CGT is zero. The commission, however, is real cash out of your pocket.
Net it out: you paid about R100,000 to get in and about R241,500 to get out — roughly R341,500 in pure transaction cost on a home that rose R1,000,000 in value on paper. Over a third of your nominal gain was eaten by the cost of transacting. Hold for only two or three years instead, and the same R341,500 can exceed your entire appreciation, turning a paper gain into a real loss. Now flip the scenario to an investment property with no primary-residence exclusion and a R658,500 gain: subtract the R40,000 annual exclusion first to leave R618,500, include 40% of that (R247,400), and at the top 45% marginal rate you would owe CGT in the order of R111,000 on top of the commission.
Why rent-vs-buy models get this wrong — and how to test yours
The single biggest error in DIY rent-vs-buy spreadsheets is treating buying as a clean monthly bond payment versus monthly rent. Buying has a large fixed cost to enter (3.5–4.5% of price) and a larger fixed cost to exit (5–7.5% commission plus possible CGT). Those costs do not scale with how long you hold — they are mostly the same whether you stay two years or twenty — so the shorter your holding period, the more brutal they are per year. Renting has none of them; your exit cost is a truck and a deposit refund.
This is exactly why the answer flips on holding period. Over twenty years, 4% in and 7% in exit costs amortise to a rounding error against decades of appreciation and avoided rent. Over three years they can be the whole story, and renting while investing the difference often wins outright. In Cape Town, where modelled gross rental yields sit around 9%, the rent-vs-buy gap is tighter than in Johannesburg's ~13.7% yields, so transaction costs are more likely to be the deciding factor in Cape Town than up north.
Do not eyeball this. The /rentvesting engine bakes in the full 3.5–4.5% acquisition cost, agent commission, CGT with the R2m and R40k exclusions, appreciation, rent escalation, rates and maintenance, and then compares buying against renting-and-investing on a net-worth basis over your actual holding period. Put in your real price, your real timeline and your marginal tax rate, and let it tell you where the break-even falls. This is general information rather than personalised advice, so treat the output as a starting point for a conversation with a professional before you sign.
Run the numbers yourself
Run your own buy-and-sell numbers in the rent-vs-buy engine
Open the toolFAQ
How much does it cost to buy a R2.5m house in South Africa in 2026?
Budget roughly 3.5% to 4.5% of the price in transaction costs, so about R90,000 to R110,000 on a R2.5m home. That covers progressive transfer duty to SARS (around R50,000–R60,000 at this price), the transfer attorney's fee and disbursements, and bond registration costs if you are financing the purchase. A cash buyer avoids the bond registration fees and pays less.
Do I pay Capital Gains Tax when I sell my own home?
Usually not, if it is your primary residence and the gain is under R2,000,000, because the primary-residence exclusion wipes out the first R2m of capital gain. Above that, 40% of the excess gain is included in your taxable income and taxed at your marginal rate, for a maximum effective rate of 18%. There is also an annual R40,000 capital gains exclusion, and your base cost includes the original price, entry costs, improvements and selling commission.
What is the estate agent's commission when selling a house in South Africa?
Commission is typically 5% to 7.5% of the sale price plus 15% VAT, and it is negotiable. On a R3.5m sale at 6% plus VAT, that is R241,500. The commission is added to your base cost for CGT purposes, which reduces any taxable gain, but it is still real cash you hand over on the day you sell.
Why do rent-vs-buy calculators leave out transfer duty and CGT?
Because simple calculators compare a monthly bond repayment to monthly rent and ignore the one-off cost to enter (3.5–4.5% of price) and exit (5–7.5% commission plus possible CGT). Those costs barely change with how long you hold, so they hurt far more over a short stay than a long one. A proper engine like the rentvesting tool includes all of them so the break-even point is honest.