Foreigners buying or selling property in South Africa
Here are some Q & A's compiled by conveyancer Annabelle da Costa regarding foreigners buying or selling property in South Africa:
1. Can a foreigner (a citizen of another country) buy immovable property in South Africa?
Yes, certainly.
2. Does owning property in South Africa give you citizenship or the right to reside here?
No, you still need an "entry document", such as a visa or a work permit, when entering SA and you can only remain in the country for the time allowed by that entry document.
3. What documents does a foreigner need when buying or selling property?
Foreign buyers and sellers need the same FICA documents as local clients, including a passport, marriage certificate, and proof of residence in their home country. If the buyer is in South Africa when purchasing, they will also need a copy of their visa and proof of the source of their funds to finance the transaction. This is required by the Financial Intelligence Amendment Act.
4. What are the requirements to sign documents for clients who are outside SA?
Any transfer or bond registration documents signed outside South Africa need to be notarized (and authenticated, if applicable) by a Notary Public, whose full details need to appear on these documents. Alternatively, you can sign these documents at a South African Consulate. We can supply specific details at the appropriate time.
5. Can a foreign client buy or sell property on their own in SA, if they are married?
A foreign seller, if married according to the laws of another country, will need to be assisted by their spouse in signing the documents (including the sale agreement) even if the property not registered in both names. A foreign buyer can buy property on their own, but if the law in their country dictates that property should be registered in the names of both spouses, the South African Deeds Office will not concern themselves with ensuring they comply with this. It is up to the buyer to comply with the laws of their country.
6. Can foreign buyers obtain a bond in South Africa?
Like all buyers, foreigners need to quality for a bond, Banks will usually grant foreigners' bonds of no more than 50% of the purchase price of the property. You can consult a mortgage originator for assistance in getting the best deal (at no cost).
7. What is the process for transferring the funds from overseas?
Buyers must give their bank the conveyancer's trust account details, including the Swift code and address of their bank, and ask their bank to transfer the funds directly to the conveyancer's trust account. Both buyers and sellers need to bear in mind that international transfers can take much longer than local transfers and allow for this when agreeing due dates for funds in the sale agreement. Buyers must keep clear records of the purchase, including a copy of the sale agreement and the statement of account issued by the conveyancer on transfer. If the buyer sells the property at a later stage and wishes to repatriate the money to their home country, they will be asked for these documents as proof of the initial transfer.
8. What tax laws do foreign Buyers need to comply with?
If income is generated in South Africa, a tax consultant should be consulted as there may be a need to pay tax in South Africa on the income.
9. What happens when a foreigner decides to sell?
If any capital gain is made on the property, the seller will have to pay capital gains tax. If the price of the property is over R2 million, the conveyancer is legally obliged to retain a portion of the proceeds and pay it over to SARS. This is known as withholding tax.
We recommend sellers get a directive from SARS to ascertain the exact tax due. The conveyancer will then only retain the exact withholding tax. We recommend sellers consult an accountant.
For further information contact Da Costa Inc:
Tel: 031 502 6902 or 032 940 4902
Email: annabelle@dacostainc.co.za