Country Guides Country Guide: South Africa

Date Published:

18/11/2009

Purchase Process

There are no restrictions on foreigners buying property in South Africa, and the legal system, based on English law, is said to be well regulated and extremely straightforward.

Having chosen a property to buy, a deposit of around 10 per cent is usually payable at this time and a fixed time period until the completion date is written into the contract. Once the necessary checks to clean title have been made, the transfer documentation contract is lodged in the regional Deeds Registry. You may choose to engage your own solicitor in the UK to look after your interests. See the Law society website for a list of professional conveyancing solicitors.

Purchase Costs

Budget up to 12 per cent for all purchase costs and fees. Based on a £100,000 new property you should expect to pay the following:

Exit Costs

Non-residents are liable for capital gains tax (CGT) when selling a property in South Africa. The tax is payable is calculated by adding 25 per cent of the capital gain, or profit, to the individual's income for that year and taxing that income at the individual's marginal rate of income tax. If you are a UK resident for tax purposes you will not pay CGT twice (ie in South Africa and the UK).

Mortgage Status

Non-residents buying a property may borrow up to a maximum of 50 per cent of the purchase price in South Africa. Interest rates are better in the UK, so you might choose to release equity in the UK to fund a purchase.