Bonding a property in South Africa as a non-resident

Foreign investors have always had a keen interest in the South African property market because of the favourable exchange rate. With the economy gradually recovering from the pandemic, experts predict that foreign investment will continue to increase. If you are a non-resident interested in bonding a property in South Africa, BetterBond is the key that unlocks the door to securing the best possible home loan deal.

How does BetterBond help non-residents?

Our expert bond consultants will partner with you and guide you through the buying process from start to finish. You complete just one application – with our support – and we apply to all the leading South African banks on your behalf. That way, they’ll compete to give you the best deal. And, our service is completely free because the banks pay us commission for each bond deal we secure for them.

Why buy property in South Africa?

Besides offering value for money, luxury housing with breathtaking landscapes and good weather, South Africa is known for having one of the best deeds registration systems in the world, with an exceptional degree of accuracy. And, you also have the flexibility of owning property individually, jointly in undivided shares or by entity such as company, closed corporation or trust.

Furthermore, as a non-resident you can:

Are there restrictions for non-residents?

No. As long as your work permits and passports are valid and up to date, you can own a property in South Africa as a non-resident. There are, however, certain requirements that you will need to adhere to, for example, if you are buying a house to live in for long periods of time, you’ll need a residence permit. Owning the property doesn’t automatically entitle you to any type of residence permit.

How does it work?

The contract must be in writing, contain specific information (see below) and you and the seller must sign it. You must sign by hand and in black ink. Once an agreement of sale has been signed, it is legally binding. Cancelling – whether it’s the buyer or seller – will incur legal costs. It’s best to do the signing in South Africa, otherwise a time-consuming signature authentication must take place.

The seller will appoint a conveyancer to manage the registration – or transfer of property rights. As the buyer, you cover the costs of the conveyancer, unless the contract stipulates differently. Conveyancing fees include transfer duty to the Receiver of Revenue, sundry charges imposed by the Deeds Office and rates or levy clearance certificates. You are also responsible for the transfer costs and the cost of registering a new bond.

The offer to purchase (agreement of sale) must contain these six provisions:

Paying tax on a property as a non-resident

You are only liable for income tax in South Africa if you earn an income from a South African source, for example, letting your property out. If you sell a capital asset (like a property) and it results in a gain, you will be liable for Capital Gains Tax.

Is it better to work through an estate agent?

Yes, they have a wealth of local expertise, even though it comes at a price. Just remember that the estate agent you use must be a registered member of the Estate Agency Affairs Board. They must have a valid Fidelity Fund Certificate.

Which compliance certificates should I get?

The seller must provide an electrical certificate to confirm that the electrical installation complies with statutory requirements. In some coastal regions the seller must provide a beetle certificate to confirm that the property is not infested by certain beetles. Depending on where you are buying, they may also need to provide plumbing and gas certificates.

What you need to start the process

Here is a comprehensive list of all the documents you’ll need to buy a property in South Africa as a non-resident:

Once you have these documents on hand, your BetterBond consultant can guide you through the buying journey. The consultant will negotiate on your behalf and seal the best bond deal on the property you want to purchase.