With South Africa’s beautiful properties, scenery and financial rates, it has become a popular property destination for non-residents.  We often transfer properties to foreign nationals and the requirements can become tricky to navigate.

In terms of the Immigration act, a “foreigner” is an individual who is not a citizen of South Africa. If such a foreigner holds a residential permit or has refugee status he can however purchase property in South Africa.

But letting / selling immovable property to an illegal foreigner is illegal in South Africa.

According to Roy Bregman in his brilliant article on GoLegal:  Can foreigners buy property in South Africa? the following formalities apply when a foreigner buys or sells property:

• “ Foreign legal entities which buy property in the country must be registered here and appoint a South African resident public officer on behalf of the local company whose shareholders are non-residents.
• There is a ‘non-resident’ endorsement on the property’s title deed. If the owner sells, they may repatriate all funds introduced from outside South Africa to acquire fixed property in the country and any profit from the sale.
• Non-residents must pay capital gains tax (CGT) on the disposal of immovable property in South Africa, including any right or interest in immovable property. If they want to repatriate funds, they must register as taxpayers and submit income tax returns reflecting the capital gain calculation.
• Suppose the South African Reserve Bank approves foreign loans to fund a land purchase via a corporate entity, then the entity may repatriate the funds and any profits, subject to the payment of CGT.
• Loans by a South African bank to non-residents are subject to foreign exchange approval from the Reserve Bank. The bank secures its loan by a mortgage bond registered in its favour. Banks will usually only lend non-residents up to 50% of the purchase price of a property.
• Non-residents who have brought funds into South Africa over several years may borrow up to 100% of the total funds invested in the country. This may amount to more than 50% of the purchase price of the property.”- Roy Bregman

Thus not something impossible to do, but be weary and careful of the requirements that needs to be complied with.

Souce:  Roy Bregman – GoLegal:  Can foreigners buy property in South Africa? the