uying property in South to purchase.
Africa as a foreigner is
not too complicated. What a An offer to purchase or sales
foreigner needs to do is first agreement needs to be signed by
find a reputable estate agent both parties and any changes need
that can help source a property to be initialed by both parties.
that is suitable.
An offer to purchase normally
If you are buying privately you contains the
can approach the seller direct
and organize an attorney to help 1)price of the property, ie,
you with the process. purchase price.
2)When the property will be
An estate agent works on transferred in buyers name, this
commission and only gets paid on usually take +- 2 months.
the successful sale of a 3)When the purchaser wants
property. Typically commission is occupation and how much rental to
around 6% of the selling price. pay if there is early occupation
4)A beetle and electrical
The seller is the person that certificate which needs to be
pays the commission not the supplied by the seller.
buyer. 5)A voetstoots clause which means
the property is bought as is, so
The buyer will be responsible for check that property out properly.
the transfer costs, ie, legal
fees and tax. 6)A fixture and fittings clause,
ie, what the house is sold with.
The buying of property in South 7)A deposit clause, it is not
Africa needs to be put in necessary to put down a deposit
writing, and is called an offer but it shows good faith and makes
your offer stronger. than 5 years in regards to
obtaining a loan from a bank.
These are just a few of the main
clauses. The purchaser is responsible of
the payment of transfer costs and
In South Africa we have a deeds the costs of registering a
office that records all property mortgage bond over the property
ownership. Property record purchased.
keeping is excellent and accurate
in South Africa. Transfer costs include transfer
duty and conveyancers fees.
Property can be owned Transfer duty is calculated as a
individually, jointly in percentage of the purchase price
undivided shares or by an entity and varies depending on the
such as a company, close purchaser's legal status. For a
corporation or trust or a similar legal person it is 8% of the
entity registered outside South purchase price. For a natural
Africa. person the calculation is as
follows :
The banks in South Africa will
lend a non resident of South · For a purchase price of R0 -
Africa 50% of the purchase price R500 000.00, the duty is 0%
subject to the conditions of the · For a purchase of R500 001.00 -
bank, such as finding value for R1 000 000.00, the duty is 5% on
the property. the value above R500 000.00
· For a purchase price of R1 000
A non resident is commonly 001.00 and above, the duty is R25
defined as a person not living in 000.00 + 8% on the value above R1
South Africa or a south African 000 000.00
who has lived overseas for more
Converyancers fees, charged by
the attorneys for attending to From 2000 to 2005 we have seen
the transfer and registration of amazing growth and all
mortgage bonds are calculated indications are there that this
according to a tariff. growth will continue.
Non residents can repatriate In Cape Town and especially in
funds from the sale of their the blaauwberg area property has
property as well as profits as grown at25% and more per annum
long as the title deed is stamped the last few years.
non resident, Profits will
attract capital gains tax as with Buying smartly and holding onto
all property transactions. property long term is the ideal
investment to make.
Capital gains tax is calculated My advice to investors is “never
at 25% of the profit on the sale sell your property”
of the property which then gets
taxed at the tax rate on income Hold onto property as long as you
for the year. can!
Non residents will need to For any advice or if you are
register for tax for the year looking to invest in property in
they sell their property. South Africa then give us a call,
we appreciate all business.
The marginal or maximum tax rate
is 40% in South Africa. Ashley D
Husband and wife Team at Remax,
I believe the property market in Cape Town, blaauwberg.
South Africa is in a boom faze
for the next few years.
About the Author:
We are a husband and wife team selling property for remax in Cape Town.
I joined remax property associates in 2003 and before that worked in property in the blaauwberg area.
My wife joined me at remax at the end of 2004
Http://www.husbandandwifeteam.com
