Financial Assistance
There are restrictions on loans to non-resident purchasers of property. In brief, the non-resident may only borrow up to a maximum of the amount invested by the non-resident in the purchase of the property, which translates into a 50% to value borrowing ratio.
Such loans are, however, subject to foreign exchange approval by the SA Reserve Bank which approvals are efficiently handled by all South African Commercial Banks offering financial assistance.
Financial assistance is granted in the form of a loan secured by a mortgage bond to be registered in favour of the Bank granting the loan.
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.
There are stringent restrictions and prohibitions imposed where the property is owned by a company and financial assistance is sought to finance the acquisition of shares and loan accounts in the property-owning company.