OWNERSHIP OF PROPERTY BY FOREIGNERS

Foreigners may own property in their own names or through a Company, Close Corporation or Trust.  There are no restrictions on a foreigners ownership of property and they may exercise all the usual rights in regard to the property including the sale, lease and raising of finance in respect of the property.

INTRODUCTION: BONA FIDE NON RESIDENT /FOREIGN EMBASSY / DIPLOMATS / CONSULATE WORKERS

The above class of Non-Resident is entitled to purchase property inSouth Africa.     The non-resident will be required to open a bank account at the financial institution granting the bond, to enable the financial institution to process the loan repayments.

When any of this class of Purchaser purchases property in South Africa and wishes to apply for a mortgage bond to finance a portion of the property purchased, an application must be made to the Reserve Bank requesting an exemption from Exchange Control Regulation (3)(i)(f) for the granting of financial assistance for the purchase of property in South Africa.  The bank will attend to this application on behalf of the Purchaser when the bond is applied for.  This class of Purchaser will however only be able to obtain a loan for up to 50% of the purchase price from a financial institution. 

The Bank to whom the application is made will still consider the usual criteria when assessing the bond application but will in addition have the requirements set out below.

1. BONA FIDE NON RESIDENT

The requirements for a Bona Fide Non Resident are as followS:

1. Certified Copy of valid Passport
2. Offer to Purchase
3. Evidence that 50% of the purchase price has been paid from outsideSouth Africa

• If funds are transferred to Estate Agent or Attorney Trust Account, proof that the funds came from an external source.
• If funds are withdrawn from the Purchaser’s (non resident) account with a South African Bank, proof must be given that the account is a Non Resident Account.
• If the funds are not inSouth Africa at the time of purchase, proof must be submitted that the Purchaser has sufficient funds in an account held outside ofSouth Africato cover 50% of the purchase price of the property.  The proof required here is a statement of the Purchasers’ foreign account certified by a bank official.

2. BONA FIDE NON RESIDENT PURCHASING TOGETHER WITH A SOUTH AFRICAN RESIDENT

The requirements for a Bona Fide Non Resident purchasing together with a South African Resident are as follows:

1. The property will have to be registered in the names of both the Non Resident and the South African Resident.
2. The Purchasers will have to produce evidence that the Non Resident Purchaser has introduced from abroad 50 % of his/her portion of the purchase price of the property. In other words if the two Purchasers will each own half the property, the Non Resident will have to pay ¼ of the property in cash using funds from outside South Africa.
3.  The same requirements as for bona fide non residents above will apply to the Non Residents half share of the cash portion of the purchase price.

3. FOREIGN EMBASSY EMPLOYEES / DIPLOMATS / CONSULATE WORKERS

The requirements for Foreign Embassy Employees, Diplomats and Consulate Workers are the same as that of Bona Fide Non Residents above.

4. SOUTH AFRICAN COMPANY OWNED BY A BONA FIDE NON RESIDENT

Where a Bona Fide Non Resident purchases property inSouth Africaand intends to register that property into the name of a South African Company, the requirements that apply are the same as that for Bona Fide Non Residents above together with the following additional requirements:

1.  If the South African Company is an existing Company the latest available audited financial statements are required reflecting the capital structure of the Company prior to the introduction of the funds by the Non Resident.  These must be accompanied by a pro forma balance sheet reflecting the capital structure of the Company after the introduction of the funds by the Non Resident.
2.  If the South African Company is a newly registered Company a pro forma balance sheet reflecting the capital structure of the Company after the introduction of the funds by the Non Resident is required.
3. Where the funds introduced by the Non Residents are reflected as “shareholder” loans in the Company, financials and an additional application to the Reserve Bank is required.

INTRODUCTION: CONTRACT WORKERS / REFUGEES / IMMIGRANTS

Where any one of this class of Resident purchases property in South Africa and wishes to apply for a mortgage bond no application is required to be submitted to the Reserve Bank.  The following will however apply.

1. CONTRACT WORKERS

Contract Workers are also described as Foreign Nationals temporarily employed inSouth Africa. 

The following are required:

1. A Declaration by Foreign National Temporarily Employed inSouth Africa(Section B5(D) Exchange Control Rulings) must be completed
2. When the Purchaser departs fromSouth Africapermanently the outstanding balance on the bonds then owing must be reduced by 50%, alternatively the Purchaser must have equal to the outstanding balance owing on the mortgage bond invested inSouth Africa.

2. REFUGEES

Refugees are persons who have been granted asylum to live and work inSouth Africa.

The requirements are the same as with Contract Workers

3. IMMIGRANTS

Immigrants are persons intending to reside permanently inSouth Africawho have applied for or have been granted permanent residence status.  The following are required:

1. A Declaration by Immigrants (Section B2(F) Exchange Control Rulings) must be completed.
2. If the Purchaser has not been granted permanent residence at the time of application for the mortgage bond, an application must be submitted to the Reserve Bank requesting permission for exemption from Exchange Control Regulation 3(1)(f) for the Granting of local financial assistance when purchasing property.
3. Should permanent residence be denied or not be taken up after approval has been granted by the Reserve Bank and the mortgage bond granted, the Purchaser will have to introduce into South Africa 50% toward the purchase price or have equal to the amount of the mortgage bond invested inSouth Africa.

REPATRIATION OF FOREIGN MONIES FROM SOUTH AFRICA

Any monies brought intoSouth Africaby a foreigner may subject to SA Exchange Control be repatriated by that

person at any time, after the payment of any taxes due, such as capital gains tax.

 

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