12/05/2026
Educating buyers on the long-term costs of homeownership during the search phase
A property is a "living" expense. Educating buyers upfront prevents them from becoming financially squeezed the moment the first municipal bill or maintenance emergency hits.
Municipal Rates
Every property owner in South Africa pays municipal rates, regardless of whether they own a freehold home or a sectional title unit. Rates are calculated by the municipality as a percentage of the property's market value and they vary between municipalities. The practical implication for buyers is that a higher-value property attracts higher rates. A buyer who has stretched to buy a more expensive home on the edge of their affordability range needs to factor this into their monthly budget, not just the bond repayment. Municipal electricity and water increases have been running above CPI for several years, with local authorities increasing water charges by between 4.5 and 14 percent and electricity tariffs by between 7 and 13 percent in the July 2025 tariff adjustments.
Levies for Sectional Title and Estate Properties
Buyers looking at sectional title properties or homes within a security estate need to understand that levies are a fixed monthly cost they have no choice about paying. Levies in standard complexes typically start from around R1,500 per month for smaller, basic developments and can exceed R10,000 per month in premium lifestyle estates with extensive facilities.
Since 2016, body corporates are required by law to maintain a reserve fund for major repairs and a 10-year maintenance plan. Special levies can still arise for unexpected major expenses. "I always encourage buyers considering a sectional title property to request the body corporate's most recent financial statements and the minutes from recent AGM and trustee meetings. An underfunded scheme is a financial risk that does not appear in the listing price.
Maintenance: The One Percent Rule
A widely used guideline in the South African market, consistent with international financial planning standards, is to budget approximately one percent of the property's purchase price per year for maintenance and repairs. On a R1.5 million home, that is R15,000 per year, or R1,250 per month, set aside for the inevitable geyser replacement, roof repair, external painting, gate motor, or other maintenance item that will arise over the course of ownership, explains Prinsloo.
First-time buyers almost universally underestimate this cost. They see the property, they see the bond repayment, and they budget for those two things. The geyser bursts three months after transfer and the R12,000 replacement is money they do not have. I make a point of raising this in every buyer conversation before an offer is signed.
Insurance
Building insurance is a mandatory condition of any South African home loan. The bank requires it before the bond is registered and maintains it as a condition throughout the loan term. This insurance covers the structure at its replacement value, which as covered in other articles is almost always higher than the purchase price. Contents insurance, while not mandatory for the bond, is separately advisable and an additional monthly cost.
The Total Picture
Financial advisors in South Africa generally recommend keeping total housing costs, including the bond repayment, rates, levies, insurance, and a provision for maintenance, within 28 to 31 percent of gross monthly income.
Discuss rates, levies, insurance, maintenance, transfer costs and even practical things like garden upkeep or older plumbing before clients make emotional decisions.
Taken from Property24 website
