Sectional Title vs Freehold Calculator
Compare the true monthly cost and 10-year total cost of sectional title versus freehold property ownership in South Africa
Common Settings
Sectional Title
Freehold
Understanding Sectional Title vs Freehold How to use • Formula • Example
How to Use This Calculator
Use the Cost Comparison tab to enter the purchase price and monthly running costs for both a sectional title unit and a freehold property. The calculator shows a side-by-side monthly cost breakdown, highlighting which option is cheaper.
Switch to the 10-Year Analysis tab to see total costs over a decade, including transfer duty, deposit, and all monthly payments. It also projects property values and equity based on your chosen appreciation rate, helping you determine which builds more wealth long-term.
The Comparison Formula
For sectional title, the levy covers building insurance, maintenance, garden, security, and sinking fund. For freehold, you arrange and pay for each of these separately, giving you more control but more responsibility.
Worked Example
Nomsa is choosing between a R1,200,000 sectional title apartment in Sandton and a R1,800,000 freehold house in Randburg. Both at 10.25% over 20 years with 10% deposit.
Sectional title: Bond R10,644/month + levy R2,800 + special levy provision R500 + rates R1,200 = R15,144/month. Building insurance is included in the levy.
Freehold: Bond R15,967/month + maintenance R3,000 + rates R2,200 + insurance R1,200 + security R1,500 = R23,867/month.
The sectional title is R8,723/month cheaper (R104,676/year). However, the freehold property at R1.8M will appreciate to ~R2.93M in 10 years (at 5%), building ~R1.7M equity vs ~R1.1M for the sectional title. The freehold costs more but builds more wealth.
Frequently Asked Questions
What does a body corporate levy cover in South Africa?
A body corporate levy covers building insurance, common area maintenance (gardens, parking, pool, gym), cleaning, security, refuse removal, and contributions to the sinking fund (reserve for major repairs). Under the STSMA (Sectional Titles Schemes Management Act), the body corporate is legally required to maintain a sinking fund for future maintenance and capital expenditure.
What are special levies and how much should I budget?
Special levies are once-off charges raised by the body corporate for unexpected repairs or major maintenance not covered by the sinking fund. Common triggers include roof repairs, exterior painting, lift replacement, and waterproofing. Special levies can range from R5,000 to R50,000+ per unit. Budget at least R500-R1,000/month as a provision. Before buying, request the body corporate's 10-year maintenance plan and sinking fund balance.
What are the STSMA body corporate obligations for owners?
Under the Sectional Titles Schemes Management Act (STSMA), owners must pay levies on time, maintain the interior of their section, comply with conduct rules, not make structural alterations without body corporate approval, and attend annual general meetings. The body corporate must maintain common property, keep financial records, hold AGMs, and maintain adequate insurance and sinking fund reserves.
Do sectional title properties appreciate at the same rate as freehold?
Historically, freehold properties appreciate slightly faster than sectional title units in most South African areas, largely because freehold includes land value which typically appreciates more than building value. However, well-located sectional title properties (especially in secure complexes with amenities) can match or exceed freehold appreciation. The key factors are location, security, and demand in the specific area.
Which is better for rental investment -- sectional title or freehold?
Sectional title is often preferred for rental investment because of lower entry prices, included security (attractive to tenants), and lower maintenance responsibility. However, some body corporates restrict short-term rentals (Airbnb). Freehold offers more rental flexibility but requires more hands-on management. Check the body corporate rules before buying a sectional title for rental purposes.