Buying property in South Africa as a non-resident: Everything you need to know about transferring funds, tax, and compliance

Key insights: Buying property in South Africa as a non-resident

• Non-residents can buy property in South Africa with no restrictions, and purchases can be completed remotely.
• Non-resident home loans are typically capped at 50% loan-to-value, so most funding comes via an international transfer.
• Funds must be transferred through an authorised dealer and recorded as an inward foreign capital payment, which is required for future repatriation.
• Section 35A withholding tax applies on sale - 7.5% for individuals, 10% for companies, and 15% for trusts.
• Repatriating sale proceeds requires an Approval for International Transfer (AIT) from SARS.

South Africa's property market has long attracted foreign buyers and returning expats, thanks to competitive pricing, an established legal framework, and an exchange rate that stretches dollars, pounds, and euros further than in most comparable markets. But while the legal process is straightforward, the financial mechanics - transferring funds in, and repatriating them later - are where most buyers run into trouble.

Can a non-resident buy property in South Africa?

Yes, there are no legal restrictions on foreign nationals buying property in South Africa. Non-resident individuals, companies, and trusts can acquire property in their own name or through appropriate structures, with no minimum price and no cap on the number of properties owned. Buyers don't need to be physically present in South Africa, as documents can be signed abroad before a Notary Public or at a South African embassy.

While ownership is not restricted, non-resident property purchases in South Africa remain subject to standard exchange control regulations, banking, tax, and anti-money laundering requirements.

One rule that catches buyers off guard: non-resident status must be disclosed at purchase, as this has direct implications for withholding tax when the property is later sold.

Non-resident home loan in South Africa: what banks will lend

Non-residents can apply for a South African home loan, but the terms are more restrictive than those available to residents. Banks generally cap financing at around 50% loan-to-value, depending on the applicant's profile and risk assessment, meaning a substantial deposit is usually required - especially for non-resident buyers without local income or credit history.

For many non-resident buyers in South Africa, this means the majority of the purchase funding will need to be transferred into South Africa from abroad. How that transfer is structured has a direct bearing on the total cost of the transaction, sometimes to the tune of tens of thousands of Rands.

Transferring funds into South Africa to buy property as a non-resident

When a non-resident transfers foreign currency into South Africa to purchase property, those funds must be processed through an authorised dealer (a bank or registered forex provider) under South Africa's exchange control regulations - and documented as an inward foreign capital payment. This record is what allows funds, and future sale proceeds, to be repatriated later.

Getting this documentation right at the outset matters: an incorrectly recorded inward transfer can create real difficulties when repatriating proceeds down the line.

On the cost side, the exchange rate applied to the transfer is where the real financial impact sits. On a R4 million property, a bank's 2% hidden margin on the spot rate could cost R80,000 in undisclosed fees; on R6 million, that rises to R120,000.

At Future Forex, we handle inward property purchase transfers for non-resident buyers, ensuring compliant processing, correct documentation, and a competitive, fully disclosed rate.

Get a free quote on your property transfer to see how much you could save with Future Forex.

Tax when buying and owning South African property as a non-resident

Non-resident buyers are subject to the same transfer duty and conveyancing costs as South African residents. Transfer duty applies on a sliding scale above R1.21 million; VAT applies instead when buying directly from a developer.

Once the property is owned, rental income is subject to South African income tax, and non-residents earning it must register with SARS and declare it annually at their applicable marginal rate.

Capital Gains Tax (CGT) applies when the property is eventually sold. The gain - calculated as the difference between the base cost and the proceeds - is included in the seller's taxable income at a 40% inclusion rate for individuals, with the resulting amount taxed at the applicable marginal rate.

Section 35A withholding tax: what non-residents pay when they sell

When a non-resident sells property for more than R2 million, the purchaser must withhold part of the proceeds and pay it to SARS. This isn't a final tax - it's an advance against the seller's CGT liability.

The withholding rates under section 35A of the Income Tax Act are:

• 7.5% if the seller is a natural person
• 10% if the seller is a company
• 15% if the seller is a trust

Sellers can apply to SARS for a directive to reduce or waive this withholding if their actual CGT liability is lower, or if no tax is due at all.

Repatriating property sale proceeds from South Africa

When a non-resident sells South African property and wishes to transfer the sale proceeds offshore, the amount that can be repatriated is limited to the original foreign capital introduced, plus any after-tax profit. This is why the original inward transfer documentation matters so much.

Repatriation must go through an authorised dealer, and requires an Approval for International Transfer (AIT) from SARS confirming the seller's tax affairs, including section 35A withholding, are settled.

At Future Forex, we assist non-resident sellers repatriating South African property proceeds with both the AIT compliance process and the outward transfer, ensuring the funds reach their destination efficiently and at a competitive rate.

The easiest way to buy property in South Africa as a non-resident

Whether you are bringing funds into South Africa for a property purchase or repatriating the proceeds of a sale, the provider you use has a direct and measurable impact on how much you retain.

At Future Forex, we specialise in large-value international property transfers for non-resident buyers and sellers - offering competitive rates, a dedicated Account Manager, and full compliance with exchange control requirements.

Speak to one of our experts today to enjoy a seamless and cost-effective non-resident property transfer.