The effect is that any person who, on or after 1September 2007, acquires immovable property in South Africa from a non-resident, must withhold a portion of the consideration payable to the seller or any agent on … Other fees involved in buying a property in South Africa include transfer costs of between 1 and 2%, mortgage costs, lawyer’s fees and estate agents fees which are normally included in the purchase price. I n South Africa there are currently no restrictions on ownership of fixed property by non-residents (provided they are not classified as illegal immigrants) and therefore all information supplied in previous articles in this series on the purchase and sale of fixed property will similarly apply to non-residents, irrespective of whether they are individuals … Are there additional costs to the purchase price? Required fields are marked *, Property For Sale The purchase of the property can be financed by obtaining a loan from a Financial Institution in South Africa, which loan will be secured by a First Mortgage Bond to be registered over the property when the property is transferred. This procedure does not apply where the shares/members interest and loans are acquired in a property-owned company/close corporation where no change in ownership is recorded. Many professionals are utilising these properties for business or to sell, eventually to make a profit. Investing in South Africa, according to the FNB House Price Index: - 4.89% of SA homes are owned by foreign investors. ● Foreigners can purchase and lease property in South Africa Copyright © Private Property South Africa (Pty) Ltd. 1997 - 2021. From 1 September 2007, a purchaser of immovable property (which has been disposed of in excess of R2 million) is obliged to withhold the amounts set out below from the purchase price payable and pay the tax to SARS, if the seller of the property is not resident in South Africa: 7.5% … Foreign buyers can freely purchase property. South African Exchange Control Regulations There are, however, procedures and requirements which must be complied with in certain circumstances, such as the local registration of entities registered outside of South Africa where they purchase property in South Africa, and the appointment of a South African resident public officer for a local company whose shares are owned by a non-resident. A non-resident buying property in South Africa has the option of buying the property in their own name or through a legal holding entity such as a trust or company structure. A close corporation is a type of company that is flexible and cheaper to form and administer than a normal incorporated company. Are there any restrictions on non-residents buying property in South Africa ? A non-resident is a person whose normal place of residence, domicile or registration is outside the Common Monetary Area. South Africa has a residence-based tax system, which means that residents are taxed on their worldwide income, regardless of where that income was earned. One thing you should be aware of is that non-residents buying property in South Africa currently may borrow a maximum of 50 per cent of the purchase price in the country. There are no legal restrictions on foreigners buying property in South Africa, although non-residents looking to invest may have to pay as much as 50% of the purchase price up-front as a deposit. On the sale of a property, can non-residents get their money out of South Africa? On registration, all existing mortgage bonds registered over the property are cancelled simultaneously with the registration of any new mortgage bonds by the purchaser in favour of the bank granting the financial assistance. Although there is a lengthy list of countries who do not need visas for visits of less than 90 days, foreign nationals from visa-restricted countries will have to apply for the relevant visa. When a suitable property has been found and a price has been agreed upon, either an ‘offer to purchase’ or a ‘deed of sale’ can be signed. Buy Property in Own Name or Through Legal Holding Entity The purchaser is recorded as the new owner of the property and the purchase price is paid to the seller. A non-resident will need to submit it to the South African Reserve Bank if and when the property is sold and the owner wishes to return the funds to the foreign country. Buy Property You should consider, through consultation with a lawyer or property expert, which option will suit your individual circumstances the best. ● The profit made on the sale of the property may be taken out of South Africa Some non-residents prefer buying property through a legal holding entity for taxation, management and asset protection reasons. Some non-residents prefer buying property through a legal holding entity for taxation, management and asset protection reasons. Finally, a non-resident can purchase South African property over the internet without entering the country. South Africa’s banking system is dependable, established and highly advanced. In South Africa, properties are normally purchased through an estate agent, who should be registered with the Estate Agents Advisory Board. Non-resident owners of South African property have all the normal rights of ownership including the right to recover rental income from lessees. This ensures that the bank’s debt is secured in the event of the outstanding balance exceeding the original loan. Everything you need to know about building a property investment portfolio - Part 2. No, except for a prohibition on illegal aliens owning immovable property in South Africa. By Elistea Vrey, Heyns and Partners Inc. With a beautiful coastal line, sunny skies and an advantageous exchange rate, investing in property in South Africa is a beneficial opportunity. The total amount that may be borrowed is at the discretion of the commercial bank offering the loan. The transaction costs of buying a home in South Africa should also be a consideration; they can range anywhere from 5–15 or more on top of your property … In fact it is a good option to have the services of a lawyer to assist throughout the entire conveyance and purchase process to check any contracts and to carry out title and land registry searches and checks. The transfer of funds through any registered South African bank is secure and guaranteed. Nothing prevents a non-resident or legal foreigner from acquiring immovable property in South Africa. Buying Property in SA as a Resident or Non-Resident (PART 1 OF A 4 PART SERIES) South Africa follows a system of land registration where every piece of land is reflected on a diagram and ownership recorded in one of the regionally located Deeds Registries where documents are available for public viewing. The program also gives home buyers visa-free travel to more than 100 countries, including the Schengen Zone (25 EU countries), Canada, the UK, Hong Kong, Singapore, etc., as well as making it easier to gain a residency permit to Monaco, Switzerland, Andorra, the UK, Bermuda, Cayman Islands, Bahamas and other Caribbean countries. 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