Buyer Guide
Sectional Title vs Freehold
The two dominant residential ownership forms in South Africa are sectional title and freehold. They differ legally, financially, and in lifestyle. This guide unpacks the differences so buyers can decide which model fits their goals, and helps sellers position their property accurately.
Authored by the Africa Estate residential specialist team.
What freehold means
Freehold ownership means you own the entire erf (the demarcated piece of land) and any buildings on it, registered in your name in the deeds office. You control everything inside the boundary: the house, the garden, additions, alterations (subject to municipal building regulations). There is no body corporate, no monthly levy, and no shared infrastructure. Decision-making is entirely yours. Maintenance and risk are entirely yours.
What sectional title means
Sectional title is the legal form used for apartments, townhouses, cluster developments and most multi-unit schemes. Under the Sectional Titles Act 95 of 1986 and the Sectional Titles Schemes Management Act 8 of 2011, the scheme is divided into sections (the individual units) and common property (land, external walls, roof, communal areas).
You own your specific section outright plus an undivided share of the common property in proportion to your participation quota. The body corporate (every owner is automatically a member) governs the common property. Trustees elected from the owners run day-to-day decisions; an AGM passes the budget and major decisions.
Levies
Sectional title owners pay a monthly levy to the body corporate, in proportion to their participation quota. The levy covers building insurance on the scheme, common property maintenance, security (if shared), and the reserve fund for major capital expenditure. Levies typically range R1,500 to R6,000 per month depending on scheme size and amenities. Special levies are sometimes raised for specific projects (roof repairs, painting, lift overhaul); these can be substantial.
Freehold owners pay no levy (unless they sit within a homeowners association estate, in which case an HOA levy applies for security and gate access). Maintenance, insurance, and capital improvements are funded directly by the owner.
Exclusive use areas
In sectional title, parts of the common property (parking bays, gardens directly attached to a unit, storerooms) can be allocated as exclusive use areas to specific owners. You do not own the area; you have exclusive use of it. Exclusive use areas attract their own portion of the levy and transfer with the unit. Check the sectional plan and the body corporate rules on exclusive use before buying.
Conduct rules and management rules
Every sectional title scheme has a set of management rules (governance: meetings, voting, trustee duties) and conduct rules (what owners and occupants may and may not do: pets, noise, short-term letting, alterations, parking). These are registered against the title and binding on every owner. Read them before buying. The scheme that suits a pet owner is different from the one that bans dogs over 10 kilograms.
Transfer duty implications
SARS transfer duty applies identically to sectional title and freehold transactions: the sliding scale starts at 0% below R1.21 million and rises in tiers. There is no rebate for sectional title versus freehold. Where new sectional title units are sold by a VAT vendor developer, VAT (15%) replaces transfer duty and is included in the price.
Resale value and liquidity
Freehold homes generally appreciate at a similar or faster rate to sectional title units in the same suburb, because land scarcity drives the long-term value of residential property. Sectional title units in well-managed schemes with reasonable levies hold value well and are often more liquid in the lower price bands (first-time buyers, investors, downsizers). Sectional title units in distressed schemes (high levy arrears, deferred maintenance, frequent special levies) lose value faster than the suburb average.
Which is right for you
Freehold fits buyers who want autonomy, land, garden, and full control of their property, and who can fund maintenance and security directly. Sectional title fits buyers who value lock-up-and-go convenience, shared security, lower entry price, and who are comfortable with a body corporate and shared decision-making. Speak to your Africa Estate residential specialist about the schemes and freehold options in your target suburb.
Want a named specialist view?
The Africa Estate specialist for your suburb knows the well-managed sectional title schemes, the schemes to avoid, and the freehold opportunities. Contact the office.
Frequently asked questions
Is sectional title cheaper than freehold?
Per square metre, sectional title is usually cheaper than freehold in the same suburb because the buyer is sharing land and external infrastructure with the rest of the scheme. However, monthly levies (typically R1,500 to R6,000 depending on the scheme) add to the cost of ownership and need to be factored into affordability. A freehold home of equivalent floor area without levies often costs less on a true total-cost-of-ownership basis.
Do I own the land in a sectional title?
You own a defined section (the inside of your unit, typically the walls in to walls in) plus an undivided share of the common property (the land, external walls, roof, communal spaces, gardens). The body corporate owns and manages the common property on behalf of all owners under the Sectional Titles Schemes Management Act 8 of 2011.
Can the body corporate stop me renting out my unit?
It depends on the conduct rules of the specific scheme. Many older sectional title schemes restrict short-term letting (Airbnb style) or require body corporate consent for letting. Newer schemes increasingly allow it. Always check the conduct rules before buying if rental yield is part of the investment thesis.
What is the difference between sectional title and cluster home?
Cluster homes are typically freehold homes sold within a security estate, with a homeowners association governing common areas and security. Sectional title is a separate legal ownership form under the Sectional Titles Act, with a body corporate. A property can be sectional title within a security estate (with both a body corporate and HOA), freehold within a security estate (HOA only), or freestanding freehold (no HOA).