Real estate investment for foreigners is relatively uncomplicated in South Africa. Provided you are in the country legally, there are no restrictions for buying and selling property as a non-resident. If non-residents are planning on staying in the country for longer periods of time, they will need to apply for a residence permit and comply with the requirements as set out in the SA Immigration Act.

How does home financing work?
According to South Africa’s leading bond originator, BetterBond, when applying for funding through a local financial institution, foreigners will typically be granted up to half the purchase price. The rest of the funds must be sourced from income generated abroad.

To receive more than half the purchase price, a temporary residence permit with a remaining term of 3 years must be presented. Most financial institutions will also require that the buyer reduce the outstanding loan amount to less than half of the original amount before returning to their country of origin, and will only grant the loan if the buyer banks with the particular bank they are applying to while they are in the country.

What Tax Laws Apply?
Unless a foreign seller has applied for a specific CGT directive prior to the transfer of the property being registered into the new owner’s name, non-residents will be required to pay Capital Gains Tax to SARS if a homeowner sells a property for more than R2 million.  

Who can help?
For a more thorough understanding of the legal requirements, foreigners should speak to an attorney who specialises in immigration law. Once they understand all the requirements, they should then partner with a real estate practitioner with global connections so they can deal with somebody from the same brand both in their country of origin and in South Africa.