Buying Real Estate in South Africa for Non-residents

1. The contract
Contracts must be in writing, and signed by both parties. Estate Agents draw up an Offer to Purchase. Once signed this constitutes a valid & legally binding contract from which neither party can withdraw without incurring legal consequences.

2. Mortgages for Non-residents
Non-resident may only borrow up to a maximum of the amount he invests into the purchase of the property, which translates into a 50% loan.

3. Transferring the property
It is customary for the Seller to appoint the conveyancer
and the Purchaser to pay the costs. The conveyancer prepares the transfer documentation which, after signature by the Purchaser and Seller, is lodged together with the cancellation of any existing mortgage bonds and new mortgage bonds to be registered in a regionally located Deeds Registry. The Purchaser is recorded as the new owner of the property and the purchase price is paid to the Seller

4. Transfer Duty
The Purchaser is responsible for the payment of these fees unless purchasing new property directly from a developer whereby by developer is VAT registered. Transfer Duty
is payable to the Receiver of Revenue.

5. Commission
Commission is payable. The Seller is responsible for this fee.

6. Exchange Control
All funds introduced from outside SA to acquire fixed property within SA may be repatriated together with any profit on resale of the property, provided the title deed of the property has been endorsed "non-resident". The profit on resale may also be repatriated, provided, the relevant securities have been endorsed "non-resident".

7. Capital Gains Tax
Non-residents are only liable to pay CGT on the disposal of the following: Immovable property situated in SA, incl. any right or interest in immovable property.
- Individuals; 25% of the Gain is taxable.
- Juristic persons (Companies, Closed Corporations); 50% of the Gain is taxable. Companies are taxed at 30%.
- Trusts, 50% of the Gain is taxable. Trusts are taxed at 40%.