You sell the family home for R1.6 million and find something smaller for R900,000.

Simple maths says you've freed up R700,000.

Property maths says: not quite.

The R700,000 isn't all yours yet

Selling and buying property comes with costs that are easy to forget when you're comparing two asking prices.

Depending on your circumstances, these can include:

• Estate-agent commission
• Bond cancellation costs
• Required compliance certificates
• Repairs needed for compliance
• Transfer attorney fees on the new home
• Bond registration costs, if you're borrowing again
• Moving and storage costs

If you still owe money on your existing home loan, the outstanding bond also has to be settled from the proceeds of the sale.

Estate-agent commission is generally paid by the seller, while the buyer normally carries the transfer costs on the property being purchased. A seller with a bonded property can also face bond cancellation costs.

Buying for R900,000 brings a useful saving

Here's one cost our R900,000 buyer avoids.

Under current SARS rates, no transfer duty is payable on properties valued at R1.21 million or less.

But this is where people can get caught out:

No transfer duty does not mean no transfer costs.

You can still pay conveyancing fees and other charges involved in registering the property in your name. If you're taking out a new bond, there can be bond registration costs too.

Buying for R2 million? The calculation changes

Now consider someone selling for R3.5 million and downsizing to a R2 million property.

At current SARS rates, the transfer duty on the R2 million purchase is R33,786.

That's before conveyancing and any applicable bond costs.

So whether you're buying for R900,000 or R2 million, the principle stays the same: the gap between the two property prices isn't necessarily what ends up in your bank account.

What about Capital Gains Tax?

There is some good news.

For the 2027 tax year, SARS increased the primary-residence CGT exclusion to R3 million of the qualifying capital gain or loss.

Importantly, that's the gain, not the selling price of the house.

The tax calculation can also become more complicated if the property doesn't fully qualify as your primary residence, so individual circumstances matter.

Smaller doesn't always mean cheaper

The purchase price isn't the only number worth comparing.

A smaller home may cost less to maintain, but a townhouse, apartment or retirement property could bring monthly levies that your old house didn't have.

Before moving, compare the ongoing costs too:

• Rates and taxes
• Levies
• Insurance
• Security
• Electricity and water
• Garden, pool and general maintenance

If the point of downsizing is to make life more affordable, what the new home costs every month can matter as much as what it costs to buy.

The Bottom Line

Downsizing can still free up a useful amount of money.

Someone moving from a R1.6 million home to a R900,000 property currently has the advantage of paying no transfer duty on the new home. But commission, conveyancing, bond and moving costs can still reduce that apparent R700,000 windfall.

Before counting what's left, count what the move itself will cost.