Trying to decide between freehold and sectional title for a home or investment in Green Point? You are not alone. The choice shapes your costs, control, and day-to-day experience in Cape Town. In this guide, you will get a clear, local view of how each tenure works, what it costs, and how to choose the right fit for your goals in Green Point. Let’s dive in.
Quick comparison at a glance
- Freehold: You own the entire stand and house. You handle all maintenance, insurance, and municipal bills. Best if you want space, privacy, and full control.
- Sectional title: You own a unit and share common property with other owners. The Body Corporate manages building insurance and common areas, funded by levies. Best if you want low maintenance and a lock-up-and-go lifestyle.
Freehold in Cape Town
Ownership and control
With freehold, you hold a single title deed to the land and the home. You decide how you use and improve the property, subject to municipal zoning and any servitudes. If the home sits inside a private estate, an HOA may set rules and collect levies.
Costs and maintenance
You pay municipal rates, utilities, and your own building and contents insurance. You also cover all exterior and interior maintenance, security, and landscaping. In an estate, you may have additional HOA levies for shared services.
When freehold fits in Green Point
Freehold suits you if you want more privacy, outdoor space, and the freedom to adapt the property. In Green Point, freehold stock is limited and often on smaller erven, which can push prices higher. Expect a more hands-on ownership experience.
Potential trade-offs
You carry the full maintenance burden and security setup. Renovations still require municipal approvals. If in an estate, HOA rules apply, and levy obligations may affect monthly costs.
Sectional title in Cape Town
Ownership and levies
With sectional title, you own a unit and an undivided share of the common property. The Body Corporate manages the building, common areas, and a shared insurance policy. Monthly levies fund operations and a sinking fund for long-term repairs.
What levies usually cover
Levies typically include building insurance, cleaning and maintenance of common areas, security, communal utilities, and managing agent fees. A sinking fund supports major projects like roof replacements or lift upgrades. Level of levies varies by building age, size, and amenities.
When sectional title fits in Green Point
Green Point has a strong supply of sectional-title apartments and mixed-use buildings. If you value walkability, security, and lower daily maintenance, this format is a strong match. It also aligns with investor goals for long-term rentals, subject to scheme rules.
Potential trade-offs
You have less control over common areas and must follow scheme rules, including policies on pets, renovations, and rentals. Amenities and premium security can increase levies. Always review the scheme’s financials and rules before you commit.
Governance and decision-making
How rules and votes work
- Freehold: You decide for your property. If in a private estate, an HOA enforces rules and collects levies under its constitution.
- Sectional title: The Body Corporate and elected trustees run the scheme, guided by the Sectional Titles legislation. Owners vote at AGMs and EGMs, usually weighted by participation quotas.
Exclusive-use areas explained
Gardens, parking bays, or patios can be exclusive-use areas tied to a unit. You may have use and maintenance duties, depending on the scheme’s rules and contracts. Confirm how these areas are managed before purchase.
Resolving disputes
Sectional schemes follow processes set out in the Sectional Titles legislation. Trustees and managing agents handle daily matters, and owners vote on key items. Certain disputes can escalate through the courts or relevant ombuds channels.
Costs, taxes, and financing
Recurring costs to plan for
- Sectional title: Monthly levy for running costs plus a sinking fund contribution.
- Freehold: Municipal rates, utilities, and insurance. Estate properties may add HOA levies.
One-time purchase costs
Both formats can attract transfer duty above the government threshold, plus conveyancing and Deeds Office fees. If you finance, budget for bond registration and bank initiation fees.
Financing notes
Banks lend on both freehold and sectional title. Lenders often review sectional scheme health, including arrears, insurance cover, and sinking fund strength. Some schemes or borrower profiles may require larger deposits, especially for non-residents.
For international buyers
Non-residents can purchase in South Africa if they follow exchange control rules when moving funds. Rental income and capital gains are taxable in South Africa for non-residents. Work with your bank, a conveyancer, and a tax adviser early in the process.
Short-term rentals in Green Point
Many sectional title schemes regulate or restrict short-term rentals. The City of Cape Town also sets by-laws and safety requirements for short-term accommodation. If short-term letting is important, confirm both the scheme rules and municipal obligations before you buy.
Green Point lifestyle fit
Green Point sits near the CBD, the V&A Waterfront, and Sea Point amenities. The area’s stock leans toward apartments and mixed-use buildings with good lock-up-and-go appeal. Freehold homes exist but are fewer and often trade at a premium due to limited supply.
Due diligence checklist
- Lifestyle: Do you want lock-up-and-go or more space and control?
- Budget: Compare purchase price and monthly running costs across options.
- Documents: Request levy statements, scheme budgets, and AGM minutes for sectional units. For freehold, ask for recent municipal accounts and confirm insurance needs.
- Renovations: Check Body Corporate rules for sectional units. For freehold, confirm municipal zoning and any HOA rules.
- Rentals: Verify scheme rules and City requirements for short-term letting.
- Financing: Discuss lender criteria and likely deposit needs early.
- Inspections: Review building condition, maintenance plans, and defect history.
- Resale: Consider demand patterns in Green Point for your property type.
Freehold vs sectional: key trade-offs
- Control: Freehold offers more control. Sectional title shares decisions through the Body Corporate.
- Maintenance: Freehold owners handle everything. Sectional owners focus on interiors while levies fund common areas.
- Costs: Freehold costs swing with maintenance. Sectional levies can be predictable but may rise with amenities.
- Lifestyle: Freehold suits privacy and space. Sectional title suits convenience and security.
Choosing your best fit
Start with your lifestyle and tolerance for maintenance. In Green Point, sectional title suits many buyers who want simplicity and access to amenities. Freehold can be ideal if you want a unique home with more privacy and scope to customize.
If you want help comparing specific properties, reviewing scheme documents, or planning a design-forward renovation, our integrated brokerage and design-build team can guide you from selection to handover. Request a private consultation with Komare Luxe Realty and we will tailor options to your goals.
FAQs
What is the core difference between freehold and sectional title?
- Freehold gives you full ownership of land and buildings, while sectional title gives you a unit plus a shared interest in common property managed by a Body Corporate.
What do sectional title levies usually cover in Cape Town?
- Levies often cover building insurance, cleaning and maintenance of common areas, security, managing agent fees, and a sinking fund for major repairs.
Can foreigners buy property in Green Point, Cape Town?
- Yes, non-residents can buy residential property if they comply with exchange control rules and should seek bank and tax guidance early.
Can a Body Corporate restrict short-term rentals in Green Point?
- Yes, scheme rules can regulate or restrict short-term letting, and municipal by-laws also apply, so confirm both before you buy.
How do banks view financing for sectional units versus freehold homes?
- Banks lend on both, but they review sectional schemes’ financial health and may require larger deposits for certain schemes or non-resident buyers.
Who maintains exclusive-use areas like parking bays or gardens?
- You may have usage rights with maintenance duties depending on the scheme’s rules and contracts, so verify the allocation and obligations in writing.
