No Worries for Foreigners Buying in SA

The information in this article is courtesy of iAfrica (SA is Easy – 14 April 2009).

With South Africa’s diverse landscapes, excellent climate and favorable exchange rates, it’s no surprise that a large amount of foreigners opt to invest in this beautiful country. There are however also many foreigners that think that it is extremely difficult to buy property in South Africa, but the contrary is that it is actually a hassle-free process.

Tony Clark, MD of Rawson Properties, explains that should a foreign buyer decide not to purchase a property in his/her own name, the purchase vehicle must nevertheless be locally registered an it must comply with South African laws. This does however not prevent a purchase made in the name of an overseas company or trust.

Also, Clark added, non-residents are allowed to buy South African property over the Internet and it is not essential that buyers should be in the country to finalise the deal. This means that transfers and bond documents can be signed overseas and should be done in the presence of a notary public of at the local South African embassy.

According to Clark foreigner buyers are allowed to raise bonds in South Africa even if they are not intending to live in SA. The bond is however limited to 50% of the total sale price. The other 50% can come from a bond raised overseas. South Africa’s lending criteria will essentially apply to foreign lenders.

Buyers will also be subject to a FICA (Financial Intelligence Center Act) investigation, the purpose of which is to ascertain that the funds used have been legally acquired.

The South African law states that foreign residents buying in South Africa are exempt from South African income tax and overseas earnings, meaning foreigners only pay on money they earn in S.A.

In essences, Clark said, this means that South Africa is one of the friendliest places to buy property and local legal professionals are adequately trained to ensure a smooth transfer of ownership.

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