Posted by John Oluwaseyi Temitope on Thursday, March 6, 2014 Under: Feature Articles
Yes, a foreigner can purchase immovable properties in South Africa, no matter where you come from.
South Africa's well established legal framework offers first world security of title to foreign buyers of immovable property. There are no restrictions on the ownership by non-residents of property situated in South Africa, except of course that, foreigners who are in the country illegally may not own property here. There are, however, procedures and requirements which must be complied with and the next few paragraphs will provide answers to some frequently asked questions that foreign buyers of South African property may have.
Can foreign funds be brought into South Africa to buy property? Yes, foreign funds can be paid into any bank account in South Africa. Usually the foreign purchaser will pay the purchase price for the property bought into the trust account of the estate agent that brokered the sale or into the trust account of the conveyancing attorney who attends to the registration of the transaction. Both estate agents and attorneys are covered by Fidelity Funds, which guard against theft or negligence on the side of the agent or attorney.
Note that the deposit (and other payments making up the purchase price) is only paid to the seller on registration of the transaction in the local deeds registry. Until then, the funds may be invested at the non-resident’s direction and for his benefit. The operation of such investments is regulated by the estate agents’ and attorneys’ professional boards.
When a non-resident transfers funds from a foreign source into a South African bank account, a record known as a ‘Deal Receipt’ is issued by the South African bank. This is an important document and the non-resident will need to submit it to the Reserve Bank when, in future, he sells the property and wishes to return the funds to the foreign country.
Also in the immigration law, it’s clearly stated any foreigner who purchase or own a property in South Africa is entitle to a permanent resident but never came across such in the last year.
2. Can money be borrowed in South Africa to buy property? Non-residents purchasing a property in South Africa may borrow up to a maximum of 50% of the purchase price from a South African financial institution ( Terms and Condition's apply ) The remaining 50% of the purchase price will therefore need to be made up of foreign funds that the non-resident transfers to a South African account. Note that foreigners who work in South Africa on the strength of a work permit, are not regarded as ‘non-residents’ by the South African Reserve Bank. They are considered to be residents for the duration of the period of their work permit and they are therefore not restricted to a minimum of a 50% loan.
In : Feature Articles
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