In short: With sectional title you own your unit plus a share of the common property, and you pay a monthly levy to a body corporate that insures and maintains the buildings and grounds. With freehold you own the house and the land outright, and every cost and repair is yours. Sectional title is usually cheaper to buy and easier to run, while freehold gives you more space and control. Before you buy a sectional title unit, read the body corporate’s financial statements, reserve fund figures, maintenance plan and rules. This is general information, not financial or legal advice.
This guide is for South Africans buying their first or next home who are weighing up a flat, townhouse or cluster against a freestanding house. It explains what you actually own, what you pay each month, the rules you sign up to, and what to check before you put in an offer.
What you own with each type
Sectional title
You own your section (the flat, townhouse or simplex itself) and an undivided share of the common property, such as the gardens, driveways, roofs, outside walls, pool and security gate. Your share is called the participation quota. In a residential scheme it is usually based on your unit’s floor area compared with the total floor area of all units, and it decides your share of the levies and your voting weight.
Some schemes also give owners exclusive use areas, such as a garden, parking bay or storeroom that only your unit may use, even though it sits on common property.
Every owner is automatically a member of the body corporate, which runs the scheme through trustees elected at the annual general meeting (AGM). Many bodies corporate also hire a managing agent to collect levies, pay bills and arrange repairs.
Freehold
You own the land and everything built on it. You decide on renovations (subject to municipal building plan approval and any title deed conditions), you arrange your own insurance and security, and you pay for every repair.
One catch: many freehold homes sit inside security estates or cluster developments run by a homeowners’ association (HOA). Then you pay a monthly HOA levy and must follow the estate’s rules, much like sectional title, even though you own the land.
Key differences at a glance
| Feature | Sectional title | Freehold |
|---|---|---|
| What you own | Your unit plus a share of the common property | The land and all buildings on it |
| Monthly levy | Yes, paid to the body corporate | No, unless the home is in an estate with an HOA |
| Building insurance | Arranged by the body corporate and paid from levies | You arrange and pay for it |
| Outside maintenance | Body corporate, from levies and the reserve fund | You |
| Changes to the outside | Need body corporate approval | Your choice, with municipal approval |
| Rules | Conduct and management rules of the scheme | Municipal bylaws, plus HOA rules in an estate |
| Disputes | Community Schemes Ombud Service (CSOS) | Neighbours and the municipality, or CSOS in an HOA estate |
What each option really costs
Costs that are the same for both
- Transfer duty: SARS charges no transfer duty on a property up to R1 210 000. Above that, the rate rises in bands from 3%. These bands apply from 1 April 2025 and were not changed for the year from 1 April 2026. Check the SARS transfer duty table for the exact amount on your price. New units bought from a VAT-registered developer usually carry VAT in the price instead of transfer duty.
- Transfer and bond registration costs: conveyancing and deeds office fees for the transfer, plus bond attorney fees if you take a home loan.
- Your home loan repayment: see our guide to calculating your home loan repayment.
- Municipal rates on your property, and your own water and electricity.
- Contents insurance for what is inside your home.
Extra monthly costs with sectional title
Your levy pays for the scheme’s running costs: building insurance, security, garden services, common area electricity and water, cleaning, repairs to common property, the managing agent’s fee and contributions to the reserve fund. Levies differ a lot between schemes, so always ask the seller or agent for the current levy and the latest levy statement.
- Levy increases: the levy is set each year when owners approve the budget, so it can go up with costs such as insurance premiums, municipal tariffs and wages.
- Special levies: if the scheme faces a large unplanned cost, such as a roof replacement, owners can be asked to pay an extra amount on top of the normal levy.
Extra costs with freehold
With freehold there is no levy, but you carry every cost yourself: building insurance, alarm and armed response, garden care, painting, roofs, gutters, geysers, boundary walls and gates. These costs are less predictable because they arrive when something breaks. A sensible habit is to set money aside every month for maintenance, rather than waiting for the first big repair. If the home is in an estate, add the HOA levy.
Sectional title: pros and cons
Advantages
- Usually a lower purchase price than a freestanding house in the same area, which helps first-time buyers.
- Building insurance and outside maintenance are handled for you.
- Shared security and facilities, such as a pool or play area, cost less per owner.
- A good fit for a lock-up-and-go lifestyle if you travel or work away.
Disadvantages
- You need permission for changes to the outside of your unit, and you must follow rules on things like pets, parking, noise and renting out.
- Levies and special levies are decided by the owners as a group, not by you.
- A badly run scheme with low reserves can leave owners facing big special levies.
- Less privacy and outdoor space.
Freehold: pros and cons
Advantages
- Full control over renovations, extensions and how you use the property, within municipal rules.
- More space, a garden and more privacy.
- Room to add a flatlet or extra rooms, subject to zoning and plan approval.
- No body corporate decisions or levies, unless you buy in an estate.
Disadvantages
- A higher purchase price for comparable space in most areas.
- Every repair, and the job of finding contractors, is yours.
- You pay for your own security.
- Costs are lumpy, so you need an emergency fund for repairs.
Which one grows faster in value depends on the area, the scheme and the market. Neither type is guaranteed to perform better, so compare recent sales of similar homes in the suburb you are looking at.
How the body corporate’s money works
Under the Sectional Titles Schemes Management Act, 8 of 2011, a body corporate keeps two funds:
- The administrative fund pays the day-to-day running costs.
- The reserve fund pays for future maintenance, repairs and replacements of common property.
The scheme must also have a written maintenance, repair and replacement plan covering the major items expected to need work in the next 10 years, with their condition, timing and estimated cost.
The regulations also set a minimum reserve fund contribution. If the reserve fund is below 25% of the previous year’s administrative fund contributions, the scheme must budget at least 15% of its administrative fund contributions for the reserve fund. A healthy reserve fund makes surprise special levies less likely.
What to check before you buy a sectional title unit
- The latest audited financial statements: look at the reserve fund balance, levy arrears owed by other owners, and any loans the body corporate has taken.
- The 10-year maintenance plan: see what big jobs are coming and whether the reserve fund can pay for them.
- Recent AGM and trustee meeting minutes: look for planned special levies, disputes, insurance claims and problems such as leaks or damp.
- The conduct and management rules: check pets, parking, renting out and running a business from home.
- The current levy and recent increases.
- Exclusive use areas: confirm which garden, parking bay or storeroom comes with the unit, and how it is held.
- Insurance: ask what the body corporate’s policy covers and what you must insure yourself. Our guide to contents vs building insurance explains the split.
The seller must also give the conveyancer a levy clearance certificate from the body corporate before transfer can go through, confirming that the seller’s levies are paid up.
What to check before you buy freehold
- Get a building inspection to look at the roof, damp, electrics, plumbing and geyser.
- Ask for the electrical compliance certificate and any other certificates your municipality or the sale agreement requires.
- Check that approved building plans exist for all structures, including additions like a flatlet or carport.
- Ask for recent municipal rates and utility bills.
- If the home is in an estate, read the HOA rules and financial statements just as you would for a sectional title scheme.
For help with the offer itself, read our tips on negotiating when buying a property.
Disputes and where to get help
The Community Schemes Ombud Service (CSOS) handles disputes in sectional title schemes, HOAs and other community schemes, such as disputes about levies, rules, meetings and trustee decisions. You can contact CSOS on 0800 000 653 or info@csos.org.za, and lodge a dispute with the application form on its website.
Estate agents are regulated by the Property Practitioners Regulatory Authority (PPRA). Before you deal with an agent, check that they hold a valid Fidelity Fund Certificate. The PPRA’s number is 087 742 0000.
Avoid property payment scams
The most costly scam is email interception: criminals send a fake email that appears to come from the conveyancer or agent with “new” bank details, and the buyer pays the deposit or transfer costs into the wrong account. Before you pay any amount, phone the conveyancing firm on a number you found yourself and confirm the account details. The same goes for levy statements that suddenly show new banking details. Never pay a deposit before you have viewed the property and signed a written agreement, and pay deposits only into an attorney’s or registered agent’s trust account.
Which is right for you?
Sectional title often suits you if you are a first-time buyer on a tighter budget, want security and outside maintenance handled, travel often, or want a smaller home that is easy to rent out.
Freehold often suits you if you want space for a family or pets, plan to renovate or add a flatlet, run a business from home, or would rather control your own costs than share decisions with other owners.
Whichever you choose, work out the full monthly cost (bond, levy or maintenance, rates, utilities and insurance) before you make an offer. Our first-time home buyers guide covers deposits, bond approval and the buying process step by step.
Frequently asked questions
Is sectional title cheaper than freehold?
The purchase price is usually lower for similar space, but you pay a monthly levy. Compare the full monthly cost of each option, not just the price.
Do I pay transfer duty on a sectional title unit?
Yes, the same SARS transfer duty table applies to both. There is no transfer duty on a property up to R1 210 000. A new unit bought from a VAT-registered developer usually includes VAT instead.
Who insures the building in a sectional title scheme?
The body corporate insures the buildings, and the cost is included in your levy. You still need your own contents insurance.
Can the body corporate charge a special levy?
Yes. If the scheme needs money for an unplanned expense, owners can be asked to pay a special levy on top of the normal monthly levy. Checking the reserve fund and maintenance plan before you buy helps you spot this risk.
What is a participation quota?
It is your unit’s share of the scheme, usually based on its floor area. It sets your share of the levies and the weight of your vote in some decisions.
Where do I complain about a body corporate or HOA?
Try to resolve it with the trustees or managing agent first. If that fails, you can lodge a dispute with CSOS.
Last checked: November 2026. Transfer duty bands come from SARS. Confirm levies, rules and costs for the specific property with the seller, the managing agent and your conveyancer before you sign.
This is general information, not financial or legal advice. Get advice from a registered conveyancer or property practitioner for your situation.