Foreign Buyers Advice

South Africa has historically been an attractive property buying destination for foreigners (also referred to as non-residents), and favourable exchange rates offer great value in South Africa. With any investment, particularly in property, the experience can be as daunting as it is exciting. Knowing what you are getting yourself into will make all the difference.

If you are considering a property investment in South Africa, it is then a welcoming thought that foreigners may purchase and own immovable property in South Africa without any restrictions, as foreigners are generally subject to the same laws as South African nationals. We have put together a short "what should I know" list of topics, based on the most frequently asked questions we encounter around any property investment, with a special focus on our non-resident client(s). Here you go:

1. Visa Requirements

It is important to note that generally no visa requirement will preclude you from purchasing property in South Africa. However, if you wish to stay a little longer and enjoy your investment, you will need to comply with the Immigration Act and apply for a visa extension or change of status. Applications are processed through VFS Global, the Department of Home Affairs' official administrative partner, which handles form submission and biometrics — though Home Affairs remains the sole decision-making authority on the outcome. Not every visa type qualifies for an in-country extension, and short-term visitor visa extensions (90 days or less) carry a real risk of the outcome not being finalised before the original visa lapses, so it's worth applying as early as possible. Although there is a lengthy list of countries whose nationals do not need a visa for visits of less than 90 days, foreign nationals from visa-restricted countries will need to apply for the relevant visa before travelling.

2. Financing Property

Loan From A Bank (Called A Mortgage Loan)

South African exchange control regulations determine the extent to which foreign buyers can borrow money locally to fund the purchase. These regulations create certain restrictions on non-residents wishing to purchase property in South Africa, and determine that a foreigner may only borrow as much as they bring into the country. This means that for every ZAR 1 (One Rand) borrowed, you will also have to introduce ZAR 1 (One Rand) into South Africa. In basic terms, as a foreigner you can typically obtain a loan of up to 50% of the purchase price. For example, if the purchase price is ZAR 1,000,000, you may be able to borrow up to ZAR 500,000, with the balance needing to be paid into South Africa from a foreign source. (Non-residents who live and work in South Africa under the appropriate visa may qualify to borrow beyond this 50% cap, as they are assessed more like SA residents for lending purposes.)

Any cash / balance purchase price introduced to South Africa must be transferred via an authorised dealer under South African Reserve Bank oversight, from the buyer's own foreign bank account to a South African bank account.

Any non-resident mortgage loan is, however, subject to foreign exchange approval from the South African Reserve Bank.

Cash purchase

Any foreign money introduced to South Africa must be routed through an authorised South African bank under Reserve Bank oversight, after which a deal receipt showing the exchange rate will be issued. This deal receipt acts as a record of the foreign funds received by the South African bank. This is an important document which must be retained for purposes of repatriation of the funds. Any foreign funds / capital may be paid into any nominated bank account in South Africa, and it is customary that this account will usually be the trust account of the estate agent or transferring attorneys, into which the deposit for the property and the balance of the purchase price will also be paid.

Once these funds have cleared, they will be released to the trust account of the nominated party, and will be invested for the non-resident's benefit. Any purchaser can rest assured that these deposits are secure and guaranteed, as the operation of these trust accounts is regulated by the professional boards of such agent / attorney.

3. The Transfer Process

In South Africa all contracts to buy immovable property need to be in writing. Such contracts usually take the form of an Offer to Purchase or an Agreement of Sale and are legally binding once signed by the buyer and seller. Contracts can be signed overseas before a Notary Public or at the South African embassy in certain countries, but non-resident buyers usually find it easier and cheaper to give a trusted representative in SA power of attorney to sign the necessary documents on their behalf.

The transfer attorney will attend to having the property registered in the new owner's name at the local Deeds Office, which keeps the record of all property titles in a particular area. The transfer process is largely an administrative one, which generally takes six to eight weeks, as the attorney first needs to obtain municipal and tax clearance certificates, cancellation figures for any existing mortgage bonds over the property, and various other documents. The process can roughly be set out as follows:

1. Sign the offer

2. Transfer attorneys receive contract

3. Bond approval

4. Receive guarantees from bond attorney

5. Fees and deposits paid

6. Documents signed

7. Transfer documents sent to deeds office

8. Transaction is lodged at deeds office

9. Property registered in new owner's name

10. Seller vacates property

11. Buyer takes occupation

12. Pay out of any funds needed and close file.

4. Transferring Proceeds of a Sale Out of South Africa (Repatriation of Money)

The number one concern we are usually asked to address by any non-resident buyer is whether they will be able to take their money out of SA once they again sell their property in future. Reassuringly, the simple and short answer is YES. Money from a foreign source, together with any profit proportionate to that non-resident's shareholding in the property, may be repatriated in due course in terms of SA Exchange Control Regulations. There is, however, some red tape and some important points to observe.

Firstly, the repatriation will need to be approved by the Reserve Bank, and the non-resident will need to produce the original agreement of sale, the transfer attorney's final account, and any deal receipts issued when they brought funds into SA.

If the non-resident owns property together with a SA resident, only their portion may be repatriated, and this is limited to the amount which can be proven to have emanated from a foreign source, plus the profit on that portion.

On transfer of the property to the non-resident purchaser, all deal receipts, a copy of the agreement of sale, together with the conveyancer's final statement of costs, must be retained by the non-resident purchaser for the duration of their ownership. These documents will need to be presented to the Reserve Bank on sale, when the proceeds are to be repatriated abroad, in order to facilitate the repatriation of the funds and profit on sale.

Finally, the repatriation of funds will be subject to any applicable capital gains tax on the property.

5. Tax Implications

There are various tax implications to owning a property in South Africa. Please note that the summary below is for information purposes only, does not cover all South African taxes, and is not to be viewed as tax advice. We strongly recommend that you seek relevant professional advice for any queries relating to tax and owning property in South Africa.

Non-residents who purchase property in South Africa will be required to register as South African taxpayers solely for the purposes of their CGT obligation. This does not have to be done immediately when the property is purchased or registered, but must be done before the property is sold in future. This is not a difficult process and is easily managed through either the parties' attorney, a tax consultant, or online.

Below are some of the taxes you will likely incur when buying, selling, or owning property in SA.

Transfer Duty

A purchaser who acquires a property, or any interest in property, has to pay transfer duty — a tax payable to the South African Revenue Service by purchasers of all types of property, in addition to the purchase price. Transfer Duty is based on the value of the property and is calculated according to a sliding scale. Here is the current Transfer Duty table:

Capital Gains Tax (CGT) (only applicable when selling)

You will be liable for the payment of Capital Gains Tax ("CGT") on the disposal of any capital asset, subject to certain limited exceptions.

The capital gain is calculated and disclosed in the individual's income tax return for the year in which the property is sold. Thus, if a non-resident disposes of immovable property in any year of assessment and is not already registered as a South African taxpayer, they will have to register as such and submit an income tax return reflecting the calculation of the capital gain, and will be liable for CGT on that gain.

CGT is calculated as the difference between the sale proceeds and the base cost. In simple terms, the base cost is the original purchase price plus any improvements to the property and costs of sale. A portion of the capital gain is included in the taxable income of the taxpayer, at the inclusion rate applicable to that taxpayer. For individuals, the inclusion rate is 40%; for companies, close corporations and trusts, the inclusion rate is 80%. The portion included is then added to the taxpayer's other income and taxed at the applicable marginal rate. The maximum effective CGT rate for individuals is 18% (40% of the top marginal rate of 45%); for companies and close corporations it is 21.6% (80% of the 27% corporate tax rate); and for trusts it is 36% (80% of the 45% trust rate).

Withholding Tax (only applicable when selling)

An obligation relating to the withholding of a percentage of the sale proceeds from non-resident sellers was introduced into our tax laws in 2007. This provision requires that, where a non-resident sells a property for more than R2 million, provisional tax must be withheld and paid to SARS in the amount of:

• 7.5% in the event of a natural (individual) non-resident seller;

• 10% in the event of a foreign company; and

• 15% in the event of a foreign trust,

unless a specific tax directive is applied for prior to registration of transfer, in which case SARS determines the exact amount of tax payable by the non-resident, which is often less than the standard withholding rate.

Income Tax

While South African residents are taxed on their worldwide income, non-residents are liable for income tax only on income accruing from a South African source. For example, if the property is rented out, the rental income will be subject to South African income tax. In addition, a non-resident is liable for capital gains tax on the disposal of a South African property, as set out above.

It is also important to note that a non-resident who has not permanently immigrated to South Africa may be considered a resident for income tax purposes if they spend more than a certain length of time within the country. This is known as the "physical presence test" and is calculated with reference to days spent in the country over a rolling period of years.

No tax is levied on foreign pensions.

Estate Duty

This is a tax on the estate of deceased persons, currently levied at 20% on the first R30,000,000 and at 25% above R30,000,000. For non-residents (foreigners), this applies only to the South African portion of their estate, after deducting an abatement of R3,500,000 and certain other allowable deductions.

6. Costs to Be Aware Of

As a rule of thumb, you should allow for between 8% and 10% of the purchase price of the property to cover all the other costs involved in purchasing a home (this includes legal fees and transfer duty). These costs are commonly referred to as Transfer Costs and are paid by the purchaser, although the seller usually appoints the transferring attorney.

7. FAQs

Do I need to open a SA bank account?

Not immediately required. However, if the buyer intends to let out the property while not in SA, they will need a non-resident South African bank account.

Do I need insurance?

Household insurance is a must, but because of the length of time the property may be unoccupied, premiums may be higher to cover the associated risks. It's important to check the terms and conditions of your policy and ensure that all specified security requirements are met. These will typically include a radio-linked alarm system with armed response, burglar guards on opening windows, and security gates on external doors.

Can non-residents lease their properties? Yes. Non-resident owners of property have all the same rights of ownership, including the right to recover rental income from lessees. Rental income is normally taxable in South Africa.

Who chooses the attorneys who will attend to the transfer of property? It is customary in South Africa for the seller of immovable property to nominate the attorneys who will attend to the transfer. Such attorneys then act for the seller and on their instructions. Consequently, in the event of a dispute between seller and purchaser, the purchaser would need to seek independent legal advice. Although the conveyancer is usually appointed by and acts for the seller, they owe a fiduciary duty of care to the purchaser. There is generally no need for the purchaser to have their own legal representation during the process; however, you are at liberty to appoint a legal representative to supervise the transfer on your behalf.

In Closing

When purchasing property as a foreigner, it is important to partner with a team of experts you can trust. The information above has been compiled and provided by Gustav Barkhuysen (BCom LLB: Stellenbosch), the founder and Director of GB LAW, a small boutique property and conveyancing law firm nestled in the heart of Cape Town, in the V&A Waterfront. GB LAW is well experienced in assisting foreign nationals purchase property in South Africa.

This article reflects South African property law, exchange control regulations, and tax rates current as at September 2026, and is intended as general guidance only — not legal or tax advice. Rates and regulations are updated periodically (transfer duty brackets and tax thresholds typically change with the annual Budget); please consult a qualified attorney or tax advisor for advice specific to your circumstances.