What Buyers Don’t Realise About Sectional Title Levies in Cape Town

Lake Properties                    Lake Properties

Lake Properties                       Lake Properties

Buying a sectional title property in Cape Town often looks attractive on paper. The purchase price appears lower than freehold homes, maintenance seems “shared,” and security is usually included. But what many buyers only discover after transfer is that sectional title levies can significantly change the real cost of ownership.

Levies are one of the most misunderstood aspects of buying apartments, townhouses, and flats in Cape Town. Sellers downplay them, listings under-explain them, and buyers often don’t interrogate them properly. That’s a mistake — because levies don’t just affect your monthly expenses; they affect affordability, resale value, and long-term financial risk.

This is what buyers genuinely don’t realise.

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Levies Are Not an Extra — They Are Part of the Real Price

Most buyers fixate on the bond repayment and mentally treat levies as a secondary cost. That’s incorrect.

In a sectional title scheme, levies are compulsory and permanent. They don’t fall away once maintenance is done, and they don’t reduce when the building is “paid off.” Whether you live in the unit, rent it out, or leave it empty, levies remain payable every month.

In Cape Town, it is increasingly common for levies to range from R1,800 to R4,500 per month, and in lifestyle or luxury developments, significantly more. When combined with bond repayments and municipal rates, levies can push monthly ownership costs far higher than buyers initially expect.

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Levies Do NOT Replace Municipal Rates or Utilities

A major misconception is that levies “cover everything.” They do not.

In most Cape Town sectional title schemes:

• Municipal rates and taxes are billed separately by the City of Cape Town

• Electricity and water are usually metered per unit (unless included via recovery charges)

• Internet, refuse, and parking charges may be additional

Levies mainly cover shared expenses, not personal consumption. Buyers who budget incorrectly often find themselves financially stretched within the first few months of ownership.

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What Levies Actually Pay For (And Why They Keep Rising)

Levies are designed to fund the operation of the entire scheme, not just visible maintenance. This includes:

• Building insurance (a major cost that rises annually)

• Security services and access control

• Lifts, pumps, generators, and fire equipment

• Managing agent fees and compliance costs

• Cleaning, gardening, and common area electricity

• Contributions to the reserve fund

Cape Town’s coastal climate accelerates wear and tear. Salt air, wind exposure, and winter rain mean higher long-term maintenance costs — which are reflected directly in levy increases.

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Low Levies Are Often a Warning Sign

Buyers love low levies. Experienced buyers fear them.

Artificially low levies usually indicate:

• Deferred maintenance

• An underfunded reserve fund

• Trustees avoiding unpopular levy increases

• A high likelihood of future special levies

In older Cape Town apartment blocks, low levies often mean that major expenses — roofing, waterproofing, repainting, plumbing stacks — have simply been postponed. When they can no longer be ignored, owners are hit with once-off costs that can dwarf any previous “savings.”

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Special Levies Can Be Financially Brutal

This is where buyers get caught off guard.

A special levy is a once-off charge raised by the body corporate to pay for large, unbudgeted expenses. These are not optional and are legally enforceable.

Examples commonly seen in Cape Town:

• R20,000–R60,000 per unit for roof replacement

• R15,000–R40,000 for waterproofing and damp remediation

• Emergency electrical or lift upgrades

If a special levy is raised after you’ve signed an offer but before transfer, liability can become legally complex — and buyers often end up paying.

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Levies Increase Almost Every Year

Unlike bond repayments (which may stabilise or reduce), levies almost always rise annually.

Drivers of levy increases in Cape Town include:

• Inflation on labour and materials

• Rising insurance premiums

• Increased security requirements

• New compliance and safety regulations

• Utility tariff increases

A levy that looks affordable today may be significantly higher within three to five years. Buyers rarely project this forward — and should.

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Participation Quota Matters More Than You Think

Levies are usually calculated based on participation quota (PQ) — essentially the size of your unit relative to the scheme.

Two similar-looking apartments can have materially different levies simply because one is larger on the sectional plan. Buyers who only compare advertised levy figures often miss this detail.

Always confirm:

• Your unit’s PQ

• Whether levies are based purely on PQ or partially equalised

• Whether exclusive use areas (parking, gardens, storerooms) attract additional costs

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The Body Corporate’s Financial Health Is Critical

You are not just buying a unit — you are buying into a financial ecosystem.

Red flags buyers ignore:

• High owner arrears

• Poorly kept financial statements

• Minimal reserve fund balances

• Repeated special levies

• Trustee infighting or resignations

Before buying, request:

• Latest AGM minutes

• Current levy schedule

• Reserve fund balance

• Maintenance plan

This information tells you far more than the estate agent’s brochure ever will.

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Banks Often Underestimate the Impact of Levies

Here’s the uncomfortable truth: banks frequently approve buyers who are already stretched.

Affordability assessments focus heavily on bond repayments and often underestimate or underweight levies. Buyers only realise the strain once all monthly obligations hit at the same time.

Levies don’t affect just affordability — they affect:

• Your ability to qualify for future credit

• Cash flow during interest rate hikes

• Rental yield if you’re buying to let

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• “Rental vs Buying in Cape Town — The Brutally Honest Numbers”

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Meta Description:
What buyers don’t realise about sectional title levies in Cape Town — including hidden costs, special levies, levy increases, and body corporate risks. Read before you buy.

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Lake Properties Pro-Tip

Never judge a sectional title property by the levy amount alone.
Judge it by the reserve fund, maintenance history, and upcoming capital works. A higher levy in a well-run scheme is usually cheaper in the long run than low levies followed by repeated financial shocks.

At Lake Properties, we don’t just sell units — we interrogate the body corporate before you commit. That’s how you avoid expensive surprises .

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Russell 

Lake Properties 

083 624 7129 

Info@lakeproperties.co.za 

www.lakeproperties.co.za