South Africa

 What I need to know as non resident foreigner before buying real estate in South Africa 

What I need to know 
As non resident foreigner 
Planning to buy 
Real estate in
South Africa 

Non-resident foreigners can freely buy, own, and sell property in South Africa, but generally can only borrow up to 50% of the purchase price locally, requiring a 50% cash deposit. You must comply with South African Reserve Bank (SARB) exchange control regulations, documenting all foreign funds introduced to facilitate future repatriation of proceeds. 

Key Requirements and Information:

Financing: 

Non-residents (bona fide) can apply for a mortgage on the remaining 50% from local banks, provided they are not living in SA long-term.

Foreign Fund Compliance:

 Funds for the purchase must be transferred from abroad. Keep detailed records of this transfer, as an Authorized Dealer (bank) must issue a "Deal Receipt" to enable you to repatriate capital and profits upon resale.

Legal Process: 

You can sign the agreement of sale via a Special Power of Attorney, or before a Notary Public/South African Embassy if you are not in the country.

Taxes and Costs:

Transfer Duty: 

A tax payable on all property purchases over R1.1 million.

Capital Gains Tax: 

Applicable upon selling the property.

Income Tax: 

Due on any rental income generated.

Ownership Structures:

 Property can be registered in your personal name, or via a company or trust.

No Automatic Residency: 

Buying property does not provide any special residency, visa, or work permit rights.

Documentation: 

You will need to provide a tax number, proof of residence, and bank statements for FICA compliance. 

Key Recommendations:

Appoint a Local Lawyer: 

Use a qualified conveyancing attorney to manage the legal transfer and ensure compliance.

Use a Trusted Broker: 

Engage an experienced estate agent familiar with non-resident transactions.