Q. - Can foreigner residents buy property in SA?

A. - Yes, foreigners can freely buy property in SA. In the event, they are purchasing property in the country with the intention of residing here for longer periods, permanent residence will have to be applied for in accordance with the given requirements and procedures of South African law. Please contact Home Affairs on that subject or visit their website www.home-affairs.gov.za

Q. – What is Agreement of Sale?

A. - All contracts to acquire property must be in writing, contain certain prescribed information and be signed by both buyer and seller to be valid and legally binding. Contracts most commonly take the form of an Agreement of Sale or Offer to Purchase, which once accepted constitutes an Agreement of Sale.

Q. - Can foreigners get financial assistance from Banks in SA for buying property?

A. - There are restrictions on loans to non-resident purchasers of property. In brief, the non-resident may only borrow up to a maximum 50% of the Purchase price. Such loans are subject to foreign exchange approval by the SA Reserve Bank. Where the sale is subject to the receiving of financial assistance, this should be included in the Agreement of Sale/Offer to Purchase as a suspensive condition.

Q. - Who does the legal registration of the property?

A. - The registration of a property transaction is handled by a specially qualified legal practitioner known as a conveyancer. It is customary for the seller to appoint the conveyancer to attend to the registration of transfer of a property, whilst the costs thereon are for the account of the purchaser, unless contractually agreed to otherwise.

Q. - What are the costs involved in purchasing the property?

A. - The Seller pays brokerage to the estate agent where applicable. The seller is also responsible for the cost of procuring 'beetle free and electrical compliance' certificates.

The Purchaser is responsible for the payment of transfer costs and the costs of registering any new mortgage bonds over the property purchased. Transfer costs include transfer duty payable to the Receiver of Revenue. These costs are limited to prescribed percentages that are governed by law.

Q. - Is a deposit mandatory?

A. - A deposit is not mandatory but serves as a gesture of good faith on the part of the purchaser and an indication of financial ability. This amount will be invested by the estate agent/conveyancer in an interest bearing trust account for the benefit of the purchaser. Keep in mind, the bigger the deposit the more negotiation power the Purchaser has.

Q. - What are demands according to Exchange Control?

A. – It is important for non-resident buying property in SA to endorse on the title deed of the property "non-resident" to be able to take money out of the country in the event of Selling the Property.

Q. - What are regulations re signing the documents?

A. - Documentation prepared by the transferring attorney is required to be signed in black ink and must be authenticated if signed outside South Africa. This is sometimes inconvenient and it is possible, and often advisable, to leave a General Power of Attorney in favour of a trusted person in South Africa to assist in this regard.

The material contained here is provided for general information purposes only and does not constitute legal or other professional advice.