Buying Property in South Africa | Process & Foreign Documents (2024)

FAQs

What documents do I need to buy a house in South Africa as a foreigner? ›

This includes a valid passport, proof of your address, your most recent bank statements, and paychecks from your employer. If you're buying the property with a mortgage, you need a certificate from the South African Reserve Bank (SARB) to confirm that you're eligible for finance.

Article summary. Foreigners (whether they be natural persons or legal entities normally domiciled or registered outside the country) can buy property in South Africa. Foreign buyers or non-residents must comply with local legislation in that regard.

BTW Apart from the rules about staying for up to 180 days there are virtually no further regulations about owning property and living in South Africa. Unless, of course, you want to apply for permanent residence and move your domiicile to South Africa.

Nonresidents are taxed on their South African-source income and capital gains from the disposal of immovable property and assets of a permanent establishment in South Africa.

FAQs. Q: Can I purchase property in South Africa if I do not have a permanent residence permit? A: Yes, you can still purchase property in South Africa, but you will need to obtain a temporary residence permit, visa, or a waiver from the Department of Home Affairs.

The Process of Buying a House

In this article, we will offer you a process and timeline to anticipate what, where, how and when. On average, to buy a house in South Africa, it takes around three months from the date of sale until the property is registered in the new owner's name.

The purchaser is required to pay the transfer duty and registration costs before the documents will be submitted to the Deeds Office, while the seller will have to provide a Tax Clearance Certificate acquired from SARS.

Under the current visa-exemption scheme, American citizens can stay in South Africa for 90 days without a visa. If an American citizen wishes to stay longer than 90 days, for tourism or business purposes, or plans to reside long-term in South Africa, they will require a long-stay permit.

How long can a US citizen stay in South Africa? ›

U.S. citizens (U.S. passport holders) visiting the Republic of South Africa for ninety (90) days or less for tourism / business purposes do not need visas.

Yes, it is possible for a South African Citizen to hold dual citizenship (be a citizen of more than one country). However, in order to make this possible a South African Citizen aged 18 years or older must apply to the Department of Home Affairs for the retention of their citizenship.

A primary residence refers to a property that is occupied by the owner. There is no taxable income that can be generated from this type of property. All costs related to the property of a personal nature and cannot be deducted from tax. Rental properties are leased and occupied by a tenant.

Can I secure residency in South Africa if I buy a property? No, you DONT get permanent residency by buying a property in South Africa.

There are no real restrictions on foreigners buying property in South Africa – although you may struggle if you have a criminal record. The South African mortgage market is a mature one and you will probably notice several similarities with financial transactions in the UK.

The first R100 000 of property donated in each year by a natural person is exempt from donations tax. In the case of a taxpayer who is not a natural person, the exempt donations are limited to casual gifts not exceeding R10 000 per annum in total.

Things to know about the financial emigration process, if you're a property owner: You must nominate an Authorised Dealer to handle your financial emigration. If you own a property in South Africa the original title deed of the property will need to be handed over to the bank that handled your financial emigration.

South Africans who meet the requirements of the section 10(1)(o)(ii) exemption (also known as the foreign income exemption or expat tax exemption) can make use of this tax relief to effectively render R1. 25 million of their foreign employment income tax free.

Yes it is possible to open a bank account in South Africa as a non-resident, and South African banks has international accounts designed for this purpose. There will be differences such as higher fees and maximum deposits and these need to be checked with your choice of bank.

To qualify for permanent residency, the primary applicant must: Have a minimum net worth of ZAR 12,000,000 (USD 820,000) Make payment in the amount of ZAR 120 000 (USD 6800) to the Director-General upon approval of the application. Be of good and sound character.

How much do you need to earn to buy a house in South Africa? ›

(Calculations are based on a 20-year mortgage at the current prime rate of 9%.): In the Eastern Cape, the average purchase price is R1 048 847 (the most affordable of all the South African provinces), so you'll need to earn at least R32 000 per month to afford a home loan of this value.

Good news for hopeful South African buyers: the property market has seen record-breaking growth over the last two years. Despite the mid-2022 slowdown in demand, which was heavily impacted by rapid rate hikes, the market still achieved an impressive 238,342 transactions worth an astounding R334 billion.

The most recent data from the Oobarometer said that the average house price in South Africa was R1,422,992 for Q4 2022. This mark only shows 1.5% growth from Q3 2022 and 2.4% YoY growth from Q4 2021.

Not only does it remove the need for a home loan application and a credit check, it also makes you more attractive to the seller. The deal can usually be closed in several days, versus an average of 10 to 15 days when attempting to close a deal that requires home loan approval.

Your local authority can go to court and get a debt judgment against you if you do not pay your property rates. Even though this is usually a last resort, SARS can also have your property attached if you don't pay your income tax.

A title deed is a registered legal document which proves ownership of a defined piece of land, a house, or an apartment in a block of flats.

Val de Vie Estate, South Africa's most secure luxury lifestyle estate, offers peace of mind to residents that get to call it home. Val de Vie Estate is a global leader in luxury wellness estates and offers countless ways to enjoy an active and diverse lifestyle for the whole family.

Can Americans retire in South Africa? ›

To qualify for a South African Retirement Visa, you must be able to prove that you receive a monthly passive income of R37. 000 (approx. $2,129) from a pension fund or an irrevocable retirement annuity or you have a net worth or a combination of assets of a minimum monthly income of the stated amount (R37. 000).

If you leave the U.S., we will stop your benefits the month after the sixth calendar month in a row that you are outside the country. You can make visits to the United States for specific periods of time, depending on how long you've been outside, to continue receiving your benefits.

Courses or boosters usually advised: Diphtheria; Hepatitis A. Other vaccines to consider: Hepatitis B; Rabies; Tetanus; Typhoid. Selectively advised vaccines - only for those individuals at highest risk: none.

The city of Cape Town, known as the Mother City, is consistently ranked as the safest city in South Africa. While its crime rate is not lower than many other cities in the country, there are lovely safe areas to explore. And like cities anywhere, there are parts that are better avoided.

All travelers to South Africa should be up to date on routine vaccinations, including diphtheria-tetanus-pertussis and measles-mumps-rubella.

Absences of more than 365 consecutive days

You must apply for a re-entry permit (Form I-131) before you leave the United States, or your permanent residence status will be considered abandoned. A re-entry permit enables you to be abroad for up to two years. Apply for a re-entry permit.

Yes, some countries don't allow dual citizenship with America. Among them are China, United Arab Emirates, India, Austria, Japan, and some others. If you want to obtain citizenship of these countries, you need to renounce your American passport.

A U.S. citizen may acquire foreign citizenship by marriage, or a person naturalized as a U.S. citizen may not lose the citizenship of the country of birth. U.S. law does not mention dual nationality or require a person to choose one citizenship or another.

If an individual rents out a property (generally residential accommodation) and receives rental income, the amount received will be subject to income tax.

What is the tax break for property in South Africa? ›

One of the biggest Tax Incentives for property investors in South Africa is Section 13sex of the SA Income Tax Act. The tax incentive enables a qualifying property investor to claim back from SARS up to 55% of the purchase price of the property or apartment over 20 years.

If you are building a new property as a developer, it's called a new property. If you buy the property straight from the developer, it becomes an unused property. You need to have 5 new or unused properties. As the tax incentive, you can deduct 5 % – 10 % of the property value every year, depending on some parameters.

Article summary. Foreigners (whether they be natural persons or legal entities normally domiciled or registered outside the country) can buy property in South Africa. Foreign buyers or non-residents must comply with local legislation in that regard.

In most cases, buying a home will require you to put down a deposit that amounts to between 10% and 20% of the home price. The remainder will then be covered by the lender once you've successfully applied for a home loan.

Since mortgages generally aren't available to U.S. buyers overseas—and most U.S. banks won't lend for purchases abroad—what are some alternatives if you want to buy a home in a foreign country? Here, we look at three ways to finance your foreign real estate purchase.

Average mortgage loan amount in South Africa Q2 2021-Q2 2022

Home buyers in South Africa paid on average 7.8 percent of home price as a deposit when taking out a mortgage loan in the second quarter of 2022. For first-time buyers, this percentage was slightly higher at 8.1 percent.

Foreigners, resident or not, can legally buy property in South Africa, and apply for a mortgage. Individual banks will set their own terms, as well as needing to work within the legal requirements of the South African Reserve Bank.

When applying for a home loan you will need documents such as your valid South African identity card or document, proof of your income, a list of your expenses, an offer to purchase (also known as a sales agreement), as well as your banking details. Use this checklist to help you get your ducks in a row.

A deposit usually requires 10% to 20% of the home purchase price. You can use ooba Home Loans' Deposit Savings Calculator to work out how much you need to save for a deposit.

There are no legal restrictions on anyone, including non-residents, buying property in South Africa. However, conditions on mortgages are stricter for foreigners than home residents. For example, all loans to foreign residents and non-residents need to be approved by the South African Reserve Bank.

Do you pay tax on property in South Africa? ›

The inclusion rate (only 40% of the capital gain will be taxed if you're an individual, and 80% if it's a company or trust selling the property). The tax rate. The more you earn, the higher your marginal tax rate. As of February 2022, the marginal tax rate can range from 18% to 45% depending on your income.

Whatever your reasons, more South Africans than ever before are looking for ways to open an online bank account abroad, and although the process can be tricky (depending heavily on your needs, preferences, and nationality), the good news is that it's certainly possible to open a US dollar bank account in South Africa.

The FNB non-resident account is widely regarded as one of the top non-resident accounts available in South Africa. It is commonly utilised by multinational businesspeople who do not intend to stay in South Africa for an extended period of time.

The minimum credit score for a home loan in South Africa is around 640. A score of 600+ will give you a fair chance of home loan approval - although this may vary according to which bank you use. A score of 670+ is considered an excellent credit score, significantly boosting your chances of home loan approval.

What is the current prime lending rate? As of March 2023, the prime lending rate in South Africa is 11.25%. It was increased by 0.25% in November 2021,0.25% in January 2022, 0.75% in September 2022, 0.25% in January 2023, and another 50 points in March 2023.

580-669: Fair. 670-739: Good. 740-799: Very good. 800-850: Excellent.