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TOP TIPS FOR NON-RESIDENTS WHEN BUYING IMMOVABLE PROPERTY IN SOUTH AFRICA

Aug 31, 2022

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As winter has its last hurrah we anticipate that tourists and visitors will start making their way back to South Africa to enjoy our beautiful country and its warm weather. This influx of foreigners sees many falling in love with the country and taking advantage of the value that South African property holds – so here follows some advice for foreigners involved in a property transaction in South Africa:

  • Firstly, YES, – non South African citizens and non-residents are allowed to buy and own immovable property in South Africa.
  • A non-resident can apply for mortgage finance in South Africa. Non-residents are however usually only eligible for an amount of up to 50% of the purchase price of the property;
  • Once a non-resident has introduced cash into South Africa with which to purchase property, they can freely repatriate these funds upon the sale of the property, together with any capital gain made on the purchase provided that the funds were brought into South Africa through the proper channels.
  • When a non-resident sells property for a sum of R2 000 000 or more, it is obligatory for the purchaser of the property (the conveyancer on their behalf in practice) to withhold a portion of the selling price, pending the determination by SARS of the Capital Gains Tax (CGT) liability of the seller. The purpose of this provision is to prevent non-residents from disposing of immovable property and avoiding the payment of CGT by the immediate repatriation of the proceeds of sale.
  • Non-residents are able to open and operate bank accounts in South Africa, which are termed “non-resident” banking accounts. Foreign funds can be freely deposited to the non-resident account and local currency (for example rental income or the proceeds of the sale of a property) can also be deposited in the non-resident account provided that the source of funds is cleared with the non-resident department of the particular bank beforehand.

We look forward to welcoming international visitors to our shores once more and assisting with their property purchase or sale. Please fee free to call one of our attorneys for further advice or assistance.