• Call (011) 791 4664 / Email info@commfree.co.za

  • Buying Property as a Non-Resident

  • South Africa is said to have one of the best Deeds registration systems in the world which is highly accurate. All the information to each piece of land including diagrams and owners details are recorded in the Deeds Registry of that region.

    Herewith some interesting and useful information which you should read if you are thinking about purchasing property in South Africa:

    1. The Transferring attorneys
    In South Africa usually the Seller of the property nominates the conveyancing attorneys who will attend to the registration of the Transfer. A Conveyancer is a qualified attorney who specialises in the transfer of property.

    2. Transfer Costs
    Although the Seller chooses the transferring attorneys the costs are usually paid by the Purchaser to the Sellers Conveyancers. The transfer costs usually include Transfer Duty, which is an amount payable to the Receiver of Revenue and is based on a formula calculated on the Purchase Price:

    Transfer duty amounts are available on request through your CommFREE property consultant.

    3. Borrowing money in South Africa to Purchase Property
    Usually Non-residents cannot obtain a mortgage bond of more than 50% of the Purchase price of the property. The remaining Purchase price must be deposited into South Africa from a foreign bank.
    Should you be interested in obtaining a mortgage bond to facilitate finance of the property in South Africa you will need to provide the bank with the following documentation:

    i. Proof of Identification (i.e. passport)
    ii. Proof of income
    iii. Proof of your residential address

    In order to make the monthly loan repayments you will need to open a banking account with a South African Financial institution. You will again need to provide the bank with the above list of documentation and once the account has been opened it will be necessary for you to deposit foreign funds into the account. It is also a good idea to register for Internet banking with that bank so that you can access your funds on the Internet when you are abroad which will be very useful.

    4. Bringing Foreign Funds into South Africa to facilitate transfer of the immovable property
    You can transfer funds from abroad into any nominated bank account in South Africa. If you are paying a deposit on the property this would either be paid into the Estate Agents trust account or the Conveyancing attorneys trust account depending on the wording of the agreement of sale. This can be done with the balance of the purchase price as well. The Estate Agent or Conveyancing Attorneys then invest the monies on your behalf in an interest bearing account. Once the transfer is registered the interest which accrued from the invested funds would then be credited to your account.

    5. Signature of the Transfer Documents
    The transfer documentation can either be signed by you here in South Africa or alternatively the documents can be sent to you abroad. It is advisable that if you are not going to be able to sign the documents in South Africa that you give someone here in South Africa a Special Power of attorney to sign the necessary transfer documents on your behalf. If the documents are sent to you overseas for signature there are certain requirements that have to be complied with. You will need to sign these documents before the South Africa Consulate.

     

    This article appears courtesy of C & A Friedlander

     

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