Non-Residents Buying Property in South Africa
By Elistea Vrey, Heyns and Partners Inc
With a beautiful coastal line, sunny skies and an advantageous exchange rate, investing in property in South Africa is a beneficial opportunity.
Nothing prevents a non-resident or legal foreigner from acquiring immovable property in South Africa. Immovable property can be owned individually, jointly, or in the name of an entity such as a trust, close corporation or company.
When the purchaser is married according to the laws of a foreign country, they must be assisted by their respective spouses upon signing documentation to be lodged in the Deeds Office for registration purposes.
Where property is registered in the name of a specific entity, prescribed requirements are to be adhered to. For instance, a foreign trust must be registered with the Master of the High Court and a foreign company must prove that it is not doing business in South Africa.
Transfer duty will be payable and calculated on the purchase price when acquiring a property for more than ZAR 750,000. If a non-resident owns rental income when the property is being rented, such rental income will be subject to income tax.
Since 2007, a duty was imposed to withhold tax when a non-resident sells a property for more than ZAR 2 million. If the seller is a natural person, 5% must be withheld, for a foreign company 7.5% and in the event of a foreign trust 10%. The seller may apply for a directive by SARS for a reduced amount or exemption.
Elistea VreyHeyns and Partners Inc., Goodwood, South Africa
T: +27 21 590 72 00
Heyns & Partners Inc. was founded in 1958 and started to conduct business under its current name in 1986. It is privileged to represent a very diverse and extensive client base, both corporate and individual, offering litigation, conveyancing and notary services.
Elistea Vrey j was admitted as an Attorney, Conveyancer and Notary Public in 2007. Her fields of practice include property law and all conveyancing matters, administration of deceased estates and estate planning. She joined Heyns and Partners Inc in 2016.
Published: Winter 2017 l Photo: michaeljung - Fotolia.com