How Foreigners can Buy Property in South Africa

As the World Soccer Cup of 2010. is getting closer, the demand for properties in South Africa by foreigners is constantly increasing. There are certain questions about how can foreigners buy these properties, and what are the usual methods by which this is accomplished. Here we will try to shed some light on this matter, and explain how can a foreigner buy a property in South Africa, and what does he need in order to do it.

The Restrictions

In the terms of the Aliens Control Act 96 of 1991, foreigners are allowed to purchase properties in South Africa. However, there are a few limitations to this. First of all is that illegal aliens are forbidden to own any immovable property in the Republic of South Africa. This is only logical, as any other decision on the matter could cause many unwanted complications. So, if you are a non-resident, and wish to purchase a property, you can do so without any problems. However, if you have an intention of actually living in that property, you will need to have either a valid permit for temporary stay in the country, or have a permanent residency permit. This is in line with the Immigration act, and is a policy that is being strictly enforced.

How to Bring the Funds for the Purchase to SA

Funds for purchasing a property in South Africa can be paid into any nominated bank account in South Africa. In most cases, this account will be the one of the real estate agent trust account. The money paid to this account will be used for the non-residents benefit. This method is safe, as trust accounts like these are being overseen by professional boards of the estate agents profession, so the purchaser can rest assured that his money is safe, and that it will be put to proper use.

The Crediting Possibilities in SA for Foreigners

There is a possibility that even as a foreigner you get a credit from a South African bank for your purchase of a property in South Africa. However, these credits are restricted to only 50% of the money necessary for the purchase, while the rest of the money must be brought into South Africa, from a foreign bank. Of course, you will need to provide the bank with proofs of earnings, and comply to all the applicable laws and acts that deal with these kind of transactions.

Non-residents and Income Tax

This is another question that people who are considering investing in SA is asking. Are non-residents liable for payment of any South African income taxes? The answer is that non-residents will have to pay South African income taxes, if they have any incomes that are deriving from a South African source. For instance, if you buy a property in South Africa, and rent it, you will be obliged to pay income taxes.

There are many other things you should consider if you are a foreigner interested in investing in South Africa, however the points mentioned here should give you some insight on this matter.