South Africa continues to attract international buyers with its lifestyle appeal, strong rental markets and favourable exchange rate. From coastal homes with sweeping views to secure lifestyle estates and commercial opportunities, there’s a lot on offer. But before signing an offer to purchase, foreign investors need a clear understanding of how property laws, residency rules and tax obligations work. The process is straightforward once you know the essentials, and that’s exactly what this guide aims to unpack.
Who can buy property in South Africa?
The good news is that South Africa places very few restrictions on who can own property. Non-residents, permanent residents, expatriates and foreign companies are all allowed to purchase real estate. The only real limitation is that foreign buyers can’t acquire agricultural land designated as farmland without special permissions, and they must comply with local exchange control rules.
Individual ownership is the most common option, but buyers can also purchase through a foreign or local company, or even a trust. Each route has slightly different tax and compliance requirements, so it’s worth getting professional advice before deciding which structure suits your investment goals.
Understanding residency and visas
Buying property in South Africa does not automatically qualify a foreigner for residency. However, property ownership can support certain visa applications, especially if the investment meets the Department of Home Affairs’ financial thresholds.
Two visas are particularly relevant:
Retired Person’s Visa: Ideal for buyers looking to spend part of the year in South Africa. It’s based on proving sufficient income rather than the value of the property purchased.
Business Visa: Suitable for investors establishing a business through their property investment, provided it meets specific capital requirements.
Those planning longer stays will need to apply for temporary or permanent residency through the usual immigration channels. Owning a home simply strengthens your application by showing commitment and financial stability.
Financing your purchase
Foreign buyers are allowed to access South African home loans, although the lending rules differ from those for local citizens. Banks typically offer up to 50% of the property value, with the remaining amount funded from overseas. This aligns with exchange control regulations, which require that funds brought into the country be recorded with the South African Reserve Bank.
Buyers should also factor in bond registration fees, transfer duties and attorney costs. While these are standard charges, they can be overlooked when planning an international purchase.
Tax obligations you need to be aware of
Understanding tax is a key part of buying property in South Africa. While the system is transparent, there are a few points every foreign buyer should know:
- Transfer duty applies when purchasing a property, unless it’s a new development where VAT replaces transfer duty.
- If you earn rental income, you’ll need to register as a taxpayer and declare your earnings. Non-residents pay tax only on income sourced within South Africa, which includes rent.
- When you decide to sell, capital gains tax (CGT) applies. For non-residents, CGT is calculated only on South African assets, and the conveyancing attorney must withhold a portion of the proceeds above certain thresholds.
While this may sound technical, a tax practitioner can easily guide you through the process and ensure you remain compliant.
Navigating exchange control
South Africa’s exchange control rules exist to monitor the flow of money across borders. For foreign investors, the key requirement is simple: funds used to buy property must be introduced into the country through an authorised dealer (usually a bank). When you sell the property later, these funds can be repatriated, provided everything was recorded correctly at the start.
Professional support goes a long way
Foreign buyers often underestimate the value of working with local specialists, from conveyancers and tax advisors to estate agents familiar with cross-border transactions. They make sure every compliance step is handled correctly, timelines are realistic, and paperwork is properly lodged.
South Africa has a stable and accessible property system, and with the right guidance, international buyers can navigate it smoothly.
Interested in purchasing property in the most sought-after parts of South Africa? Then take a look at DG Properties’ residential homes for sale and start your journey to South Africa today.
