Questions and answers for foreign buyers

Foreigners are referred to as non-residents in South Africa. A non-resident can be a natural person or a legal entity whose normal place of residence or domicilium falls outside the common monetary area, which consists of South Africa, Lesotho, Namibia and Swaziland. All property transactions by non-residents have to be routed through the South African Reserve Bank.

Q:  Can non-residents purchase property in South Africa?

A:  They can, but they cannot be granted a loan for the full purchase price.

Q:   To what extent can a property be financed by means of a South African loan?

A:  A non-resident may borrow up to a maximum of 50% of the purchase price. The  other 50% of the funds have to be brought into the country by the buyer.

Q:   How does one go about applying for mortgage bond facilities to the Reserve Bank?

A:   All requests for foreign purchases of South African property must go through a local bank.

Q:   How long does it take for the Reserve Bank to process an application?

A:   It normally takes one to two weeks.

Q:   What happens once approval has been received?

A:   A non-resident account must be opened from which the bond repayments must be made.

Q:   How can a non-resident bring funds into South Africa?

A:   A non-resident account is opened locally, after which the money is transferred into the account electronically. Cash may also be paid into the account, but needs to be converted into South African Rand.

Q:   Can a non-resident take funds out of South Africa when the property is sold?

A:   Funds brought into the country by a non-resident may be repatriated at any time.  Capital gains on immovable property will however be taxed.