Advice to foreigners buying property in SA
With Cape Town suddenly taking on a truly international look as a result of the influx of World Cup visitors, Lanice Steward, MD of Anne Porter Knight Frank, the 27 year old estate agency, is using her various media channels to tell those from other countries that South Africa is one of the easiest countries in the world in which to buy a residential property.
Unlike so many countries, said Steward, the red tape and restrictions are minimal and the SA Reserve Bank allows you to repatriate your money if and when you decide to sell.
South Africa does, she says, list overseas buyers as non-residents unless they take out SA citizenship but it is exceptionally accommodating to them.
Steward then gave some advice and information for foreigners becoming South African property owners.
Firstly, if the buyer is paying with cash, he must ensure that he has his own copies of the title deeds and financial documents and that these are stored in a safe place. They will have to be produced, said Steward, if the buyer at any stage chooses to sell and repatriate his cash.
Overseas buyers, said Steward, are allowed to take out a South African mortgage but only up to 50% of the propertys value. The rest has to be paid in cash or by means of a second bond taken out in the buyers home country.
In South African property law, said Steward, a signature on a contract is totally binding. This, she said, is not the case in some other countries, particularly if the seller gets a better offer but here, once a contract is signed, it cannot be changed without the consent of both parties.
South Africa also differs from certain other First World countries in that here the estate agent is authorised to draw up a sale agreement which has then to be sent to the sellers attorney/conveyancer for processing.
Most SA property, said Steward, is bought in the individuals name but the foreign buyer, like SA buyers, has the option of buying by means of a holding vehicle: a trust, a close corporation or a company. Whatever he uses, he or his holding vehicle will have to obtain a tax number from the SA Revenue Services to buy or sell property in SA.
Any foreigner selling a SA property, said Steward, will pay capital gains tax on the same basis as a South African (i.e. on a pro rata basis in relation to his total tax).
Steward said that despite the recent growth in the strength of the rand, SA property can still be had for an almost ludicrously low outlay when bought with European, UK or US currencies and, as one of the six most attractive cities in the world (according to a Daily Telegraph survey), Cape Town offers on its doorstep, beaches, mountain hikes, restaurants, theatres and other entertainment facilities that compare well with the best in the world.
In addition to this, Cape Town has the inestimable benefit of being in roughly the same time zone as the Western European and Scandinavian countries and the UK. An easy overnight flight puts all this at your disposal without strain or time wasting.
Article by: www.anneporter.co.za