How to find your South African home

Your first step as a foreigner would be to make contact with an accredited estate agent. South Africa has one of the best Deeds Registry systems in the world, offering certainty and security in respect of property ownership and tenure. Non-residents are subject to the same well-established laws and regulations as South Africans when buying property, and they are assured of guidance throughout the process as estate agents are involved from property selection through to the conclusion of the Deed of Sale. Various established estate agents are available to whisk new buyers off to home viewings each day. The procedure is relatively straightforward, but it is important to work through a reputable real estate company, and with an experienced and accredited agents.

Once you have decided on a property, the agent will prepare an offer to purchase, which is open to acceptance by the seller for an agreed-upon period of time during which the offer is irrevocable and, once accepted by the seller, it becomes a binding contract.

Additional costs

The most costly expenses are the various taxes which property owners in South Africa must pay:

– The transfer duty, which is calculated according to the purchase price, is paid by the buyer prior to the registration.

– Property rates and taxes are payable annually or monthly, and calculated on the municipal value of the property. A portion has to be paid in advance so that rates a clearance certificate can be obtained for the registration.

– Capital Gains Tax, calculated on the profit, is due once the property is sold. For a natural person, the rate is between 0% and 16.4% of the capital gain.

Money matters

Due to high interest rates, most foreign investors who require finance will do so abroad, but non-residents can apply for a home loan from a South African financial institution. However, due to the Reserve Bank’s exchange control requirements, they may only obtain a loan for 50% of the purchase price, and the sale will then be subject to a suspensive condition, which will render the contract null and void if the loan application is unsuccessful. It is also advisable that foreign purchasers open a local bank account to deal with any funds earned from their properties and regular payments required to deal with the property before leaving the country.

Visa requirements for enjoying your South African home

• a Permit for Retired Persons which can be made on a temporary (valid for four years at a time) orpermanent residency basis,
• and an Independent Financial Persons’ Permit which is for permanent residency only.

Applicants for both temporary and permanent residence permits based on retirement must be able to offer proof of an income of at least R37 000 a month, although it’s also acceptable at various missions for temporary permit applicants to prove that they have at least R1.776 million in an account anywhere in the world. Financially independent retirees may apply for permanent residence on the basis of net worth if they can demonstrate a net worth of at least R12 million and, upon approval, an amount of R120 000 is payable to the Department of Home Affairs before the permit is issued to the applicant.

Foreign buyers who will experience the most difficulty are families with no ties to South Africa, who want to relocate permanently. Unless the applicants are independently wealthy, their success will depend upon the skills and qualifications they offer, and whether or not there is scarcity of people with their field of expertise in South Africa [critical skills list].