Property Downsizing Calculator
Calculate how much equity you release and how much you save monthly when moving to a smaller property in South Africa
Current Property (Selling)
New Property (Buying)
Sale proceeds
Purchase costs
Understanding Property Downsizing How to use • Formula • Example
How to Use This Calculator
Use the Equity Release tab to calculate how much cash you free up when selling your current home and buying a smaller property. Enter your current property value, outstanding bond balance, and the new property price. The calculator accounts for agent commission (typically 6% + VAT), compliance certificates, CGT, transfer duty, and conveyancing fees.
Switch to the Monthly Savings tab to compare your current housing costs (bond, rates, maintenance, insurance) with projected costs at the new property, including body corporate levies for sectional title units.
The Downsizing Equity Formula
Where selling costs include agent commission (6.9% incl. VAT typical), compliance certificates (~R3,100), and any CGT. Buying costs include transfer duty and conveyancing fees + VAT.
Worked Example
Margaret (68) owns a 4-bedroom house in Durbanville valued at R2,500,000 with an outstanding bond of R400,000. She originally paid R1,200,000.
She wants to downsize to a 2-bedroom sectional title unit in a retirement village at R1,500,000.
From the sale: After 6% + VAT agent commission (R172,500), compliance certificates (~R3,100), and settling her R400,000 bond, Margaret nets approximately R1,924,400. Her R1.3M capital gain is covered by the R2M primary residence CGT exclusion, so no CGT is payable.
Buying costs: Transfer duty on R1.5M is ~R8,714, plus conveyancing fees ~R18,400 incl. VAT. Total purchase cost is approximately R1,527,114.
Margaret releases roughly R397,286 in cash and saves approximately R3,500/month in reduced rates, maintenance, and no bond payment.
Frequently Asked Questions
Do I pay capital gains tax when downsizing my primary residence?
If the property is your primary residence, you enjoy a R2,000,000 CGT exclusion on capital gains. Only the gain exceeding R2M (after the R40,000 annual exclusion) is taxable. For most downsizers, this means zero CGT. If it is an investment property, the full gain (less R40,000 annual exclusion) is subject to CGT at your marginal rate times the 40% inclusion rate.
What is the difference between life rights and freehold in a retirement village?
Life rights give you the right to occupy a unit for life but you do not own the property -- the developer retains ownership. On resale, the developer typically takes 10-30% of the capital gain. Freehold (or sectional title) means you own the unit outright and benefit fully from any capital appreciation. Life rights are generally cheaper upfront but offer less financial flexibility.
What are typical sectional title levies in South Africa?
Sectional title levies vary widely depending on the complex and facilities. As a guideline, expect R1,500 to R4,500 per month for a typical 2-bedroom unit. Levies cover building insurance, common area maintenance, garden services, security, and the sinking fund. Watch out for special levies for major repairs (roof, lifts, painting) which can run into tens of thousands of rands.
How long does the downsizing process take?
The full process typically takes 3 to 6 months. Selling your current home takes 2-4 months (listing to registration), and buying the new property runs concurrently or sequentially. Bridging finance may be needed if the sale and purchase do not align perfectly. Allow extra time for retirement village applications, which often require health assessments and committee approval.
Should I sell first or buy first when downsizing?
Selling first is generally safer as you know exactly how much cash you have. However, you may need temporary accommodation. Buying first gives you time to move but requires bridging finance (at prime + 2-3%), which is expensive. A common strategy is to make the purchase offer subject to the sale of your current property, though not all sellers will accept this condition.