What you should know about buying and renting property in South Africa

Buying and renting property in South Africa

There’s a lot to know about buying and renting property in South Africa if you’re planning on moving here. Especially if you want to ensure that you enter into an agreement that’s fair and legal.

Many people choose to first rent and then look for a place to make their permanent home. Let’s thus start by looking at what you should be aware of when renting and then we’ll move on to the processes and costs when buying a house.

1. Renting property in South Africa

In order to rent a property in South Africa, you are required to have a valid visa or permanent residency for South Africa.

Let’s look at factors to keep in mind when you decide to rent instead of buy when living in South Africa.

1.1 The rental process

Once you’ve found a place you like, the first step is paying a non-refundable holding deposit if requested. The agent or owner will then undertake reference checks to confirm your identity and your employment details. Once this has been completed, you’ll be ready to sign your lease agreement.

1.2 The costs involved

In South Africa it is standard for the first payment to be a deposit plus the first month’s rent. However, as explained on Expatica, your landlord or agent may also charge a referencing fee and the cost of drawing up the lease.

1.2.1 About your deposit

There aren’t any South African laws prescribing the limit of rental deposits, but the standard is an amount equal to one month’s rent. In some cases you’ll be asked for an amount equal to six weeks’ or two month’s rent.

Our advice is to refrain from paying a deposit that’s more than two month’s rent. You could be dealing with an unscrupulous landlord or agent.

1.3 Your rental agreement

Let’s start with the most important information – you should always insist on a written rental agreement as well as an incoming inspection. This will protect you more than you think if any disagreements or unfairness happen.

Ensure that the rental agreement includes all of this information, as per Expatica:

  • The landlord’s name and postal address.
  • The estate agent’s contact details.
  • The address of the property.
  • How much rent should be paid and when.
  • Any pre-agreed rent increase when the lease gets renewed – for example, 10 percent in 12 months).
  • The landlord and tenant obligations, i.e. who pays for utility bills.
  • The conditions on which the agreement can be terminated – for example, the tenant failing to pay rent or the landlord breaking the agreement.

You might want to add a clause that provides for an event where you have to suddenly leave South Africa. You never know what could happen with your visa in future.

1.4 Average rental prices

According to Numbeo, these are the average rental prices you can expect to pay in South Africa’s four major cities (as at August 2020):

Cape Town

Property TypeRental per month
1-bedroom apartment in city centreR10,844.84
1-bedroom apartment outside city centreR7,691.91
3-bedroom apartment in city centre​R23,168.33
3-bedroom apartment outside city centreR15,389.13


Property TypeRental per month
1-bedroom apartment in city centreR7,027.87
1-bedroom apartment outside city centreR5,886.96
3-bedroom apartment in city centre​R13,491.94
3-bedroom apartment outside city centreR10,986.84


Property TypeRental per month
1-bedroom apartment in city centreR4,997.06
1-bedroom apartment outside city centreR5,280.00
3-bedroom apartment in city centre​​R9,230.77
3-bedroom apartment outside city centreR10,667.95


Property TypeRental per month
1-bedroom apartment in city centreR5,156.25
1-bedroom apartment outside city centreR5,006.67
3-bedroom apartment in city centre​R9,724.14
3-bedroom apartment outside city centreR9,399.97

2. Buying property in South Africa

What do you do when you want to get to the facts? You go to the experts of course. That’s exactly what we did when we asked Marco Garuti of SAHomeBuyers what he thinks foreigners should be aware of when buying property in South Africa.

Here’s what he had to say:

  • Anyone, including non residents and temporary residents, may purchase property in South Africa.
  • Standard sale agreements generally provide the buyer with little protection against risks like subsidence, structural problems, leaks, damp, wood rot and third party rights over the property.
  • It’s recommended to get a qualified inspector to provide professional comment on the condition of the property.
  • There is usually only one attorney involved in the process, paid for by the purchaser but acting for the seller.
  • An independent attorney should be appointed by the buyer to obtain legal opinion of the title holding restrictions.
  • Once an Offer to Purchase is signed by the buyer and seller, the terms are binding and it is impossible to withdraw from the sale.

Now let’s look at some specific factors to be aware of when buying a house in South Africa.

2.1 The property buying process

Buying a property happens in four stages:

  • You find your ideal property and make an offer. This is usually done through the designated estate agent. The agent will request a formal letter confirming details of your offer and then send this letter to the seller for his or her approval. If the seller agrees to accept your offer, both parties will sign the document.
  • The seller appoints a conveyancer. The conveyancer will deal with the legal aspects of the transaction.
  • You’re registered as the new owner. You submit the identification documents to the Deeds Registry so that you can officially be registered as the new owner.
  • The title deed is delivered. Once you’ve been registered as the new owner, you’ll have to pay the remaining balance and the conveyancer will deliver the title deed.

2.2 Costs to be aware of

When you buy property in South Africa, you’ll typically need to pay transfer duty plus a Deeds Office Registry fee and conveyancing fee.

2.2.1 Transfer duty:

Transfer duty is payable by the buyer on all pre-owned properties in South Africa valued at more than R1000 000​:

Value of propertyRate
R​1 – R1000 000​0%
R1 000 001 – R1 375 0003% of the value above R1 000 000
R1 375 001 – R1 925 000​R11 250 + 6% of the value above R 1 375 000
R1 925 001 – R2 475 000R44 250 + 8% of the value above R 1 925 000
R2 475 001 – R11 000 000R88 250 +11% of the value above R2 475 000
R11 000 001 and aboveR1 026 000 + 13% of the value exceeding R11 000 000

Source: SARS – 2021 (1 March 2020 – 28 February 2021)

Newly-built properties acquired from developers, on the other hand, attract value-added tax (VAT) at 15% of the value, included in the sale price.

2.2.2 Deeds Office Registry fee:

As explained by Private Property, the Deeds Office Registry fee is charged by the Deeds Office for the registration of your bond.

Private Property goes on to explain that the amount is fixed according to the amount of your home loan. For example,  a bond of R 600 000.01 – R 800 000.00 attracts a fee of R 852.00. Whereas a bond of between R 1 000 000.01 – R 2 000 000.00 has a fee of R 1098.00.

It’s also worth noting that you’ll have to pay this fee before the transfer of the property.

2.2.3 Conveyancing fee:

The conveyancing fees you have to pay will depend on the purchase price of the property. The amounts are based on tariffs recommended by the Law Society, but may differ slightly from one law firm to another and always includes VAT at 15%.

As is the case with the Deeds Office Registry fee, conveyancing fees are to be paid before the transfer of the property happens.

See a full list of costs here.

2.3 Closing thoughts on buying property

‘An intimate understanding of every location is considered critical in making a good buying decision’, says Marco Garuti. For instance, find out what the neighbourhood is like, what the schools in the area is like and how easy it would be to get to and from work.

Garuti also recommends an independent price-guidance supported by a valuation report to fully understand the market value of the property considered. It’s the best way to establish whether or not you’re about to pay a fair price for the property.

To see how SAHomeBuyers can help you with this, as well as finding your ideal home, you can visit their website.

Recapping buying and renting property in South Africa

Buying and renting property in South Africa might differ from how you’re used to it, which makes it vital to know exactly how each process works and what’s expected of you.

If you’re buying, seriously consider appointing a buyer’s agent to represent you during the process.

When it comes to renting, get everything in writing and insist on an incoming inspection. You’ll be glad you did!