Can foreigners own property in South Africa?

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Can foreigners own property in South Africa?

foreigns owning property

Investing in a property can be a very daunting experience, and as such we would always recommend that any foreigner who would like to purchase a property contact an attorney or a reputable estate agency to seek ethical and professional advice. The facts of every matter will invariably differ on a case-by-case basis, and it is therefore crucial that proper legal advice is sought.

A foreigner does not only include a natural person (like you or me as individuals) but includes a foreign company and trust as well. It should be kept in mind that should a foreign company or trust wish to purchase a property within the Republic of South Africa, it will be required that they be registered within the country as a foreign company or trust.

Also important to consider is that the same laws which apply to South Africans in terms of buying property will apply, in the most part, to foreign nationals as well. Normally there are no restrictions when it comes to foreigners purchasing and owning property in South Africa, unless if a foreigner is in South Africa illegally, thus such foreigner would be banned from purchasing and owning property.

While purchasing a property in South Africa may seem very exciting, there are a couple of things that should be considered.

1. Know the reasons for purchasing a property

The question that should be asked is whether the property is purchased for investment purposes, or whether you intend to stay in the property for a long period of time. Clarity on this issue is needed to establish whether it is required for the foreign national to obtain a visa.

In terms of South African law, it clearly states that should you wish to stay in the property for a long period of time, it is required that you comply with the Immigration Act 13 of 2002.

What is important to remember in terms of the Immigration Act 13 of 2002?

If you are an individual, it is required that you apply for a Visa. This is dependent on your country of origin, the purpose of your visit, and for how long you intend to stay in the country. Although there are quite a few countries which do not require visas, should you visit be for a period which does not exceed 90 days, foreigners from visa restricted countries will have to apply for the relevant visa.

Foreigner companies and trust

Should a foreigner who is purchasing a property in the name of a company or any other legal entity, rather than in their own capacity, it is required that they first register the entity in South Africa and appoint a local public officer.

2. Transfer of the property – signing the documents

Should a foreigner not be present in South Africa at the time when the transfer or bond documents need to be signed, the purchaser will have to make sure that either one of the below methods of signing is followed to ensure that the bond and/or transfer documents are correctly processed and authenticated for use within South Africa.

Depending on the country of signature, the methods are as follows:  

  1. Schedule an appointment with a Notary public, to sign the documents and have it notarised, or
  2. The purchaser might need to have the documents apostilled, or
  3. The purchaser can take the bond and transfer documents to the South African Embassy to have it signed.

We would always recommend consulting with your attorney first to establish which of the above-mentioned options should be used to ensure that the documents are correctly signed and authenticated for use in South Africa.

What if a power of attorney is signed, authorising a person who resides in South Africa to sign all bond and transfer documents on behalf of the foreign purchaser?

Should a foreign purchaser provide a power of attorney, authorising a specific individual who resides in South Africa to sign all bond and transfer documents on their/its behalf, it is important to remember that such individual will not be able to sign an affidavit on behalf of the foreign purchaser, nor will such individual be allowed to sign any bond documents on behalf of the foreign purchaser.

This thus means that the bond documents and all affidavits will have to be signed by the purchaser personally and in accordance with the applicable above-mentioned method of signing and authentication.

3. What are some of the additional costs that the foreign purchaser should take into consideration when purchasing a property in South Africa? 

As previously mentioned, the South African law which applies to South Africans, will also apply to foreigners when a property is purchased or sold within the country.

Some of the costs that should be considered are as follows: 

Transfer Duty

When a foreigner purchases a property, and the purchase price of the property exceeds the amount of One Million Rand the foreigner will be held liable for the costs of transfer duty. The amount of transfer duty payable is determined in accordance with the sliding scale provided by the South African Revenue Services (SARS).


Should the foreigner purchase the property from a developer, such purchase would normally attract VAT, rather than transfer duty. The VAT amount is normally included in the purchase price of the property. It is important to remember that transactions can either attract VAT or Transfer Duty. Both cannot be payable in one transaction; it will always be either-or.

Tax obligations

Capital Gains Tax 

In simple terms, capital gains tax is payable by individuals, trusts, and companies, to SARS when you sell your property, and the value of the property has increased in value since you have purchased it. There are however some exclusions when it comes to capital gains tax, and we suggest that you arrange a consultation with your attorney to discuss the possible exclusions, and to determine whether the exclusions apply to your property sale.

Withholding tax

Should a foreigner wish to sell their property, South African law states that a withholding tax of a certain percentage of the sale of the property of more than Two Million Rand becomes payable to SARS, until a clearance is received from SARS for any amount to be paid to the seller or the seller’s agent.

When a foreigner purchases a property in South Africa, it is required that the foreigner must register as a South African taxpayer for purposes of their capital gains tax obligation.

Foreigner Purchasers, whether it be individuals, or a company or trust, that is purchasing or selling immovable property must ensure that they have a South African tax number.

4. Can a foreigner obtain a bond in South Africa?

A foreigner can obtain a bond in South Africa, however the South African exchange control regulations determine the extent to which the foreign purchaser can borrow money locally to finance their purchase. When a foreigner who does not work in South Africa purchases a property, the financial institution will more than likely grant the foreigner a bond for not more than 50% of the purchase price. This thus means that the foreigner will have to settle the balance of the purchase price by paying cash.

However, should the foreigner be a temporary worker in South Africa, and such foreigner applies to a financial institution to finance the purchase of a property, the financial institution is more than likely to grant a bond for more than 50% of the purchase price. It must be kept in mind that there are numerous criteria which the financial institution will consider before granting a bond for more than 50% of the purchase price.


Before purchasing a property in South Africa we recommend that you consult with an attorney and partner up with a team that will ensure that you are provided with the correct information and support. Hammond Pole Attorneys’ property law department consists of numerous qualified individuals with sufficient knowledge to assist you throughout the process.


Contact Ardené Nel at Hammond Pole Attorneys if you have any enquiries about the above topic.

011 874 1800


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