Non-Residents
There are no restrictions on property ownership by non-residents, save for a prohibition on illegal aliens owning immovable property within South Africa.
There are, however, procedures and requirements which must be complied with in certain circumstances, such as, the local registration of entities registered outside of South Africa where it purchases property in South Africa and the appointment of a South African resident public officer for a local company whose shares are owned by a non-resident.
In the event of a non-resident purchasing property in the country with the intention of residing here for longer periods, a resident-permit will have to be applied for in accordance with the given requirements and procedures of South African law.
Funds can be transferred into South Africa in several ways, including:
- By telegraphic transfer from outside South Africa. Upon arrival of the funds at a local bank, a non-resident account is opened in the client's name.
- By cash being introduced to a local bank. The cash must be converted into South African rands at the bank and a non-resident account is opened in the client's name.
It should be noted that the banks charge lower commission for transferred funds cash conversions.
The bank should be notified of the purposes for which the funds are being introduced so as to set up a record of their transfer from outside South Africa and to endorse the deed of transfer or share certificate "non-resident".
Should the non-resident decide to sell the property at a later stage, the full proceeds can then be freely transferred out of the country by exhibiting the deed of transfer of the property and the subsequent deed of sale in respect of the re-sale, which will serve as proof of the amount originally introduced from outside South Africa and the amount realised on re-sale.
The bank can also request copies of the deal receipts issued at the time of the purchase.
Non-residents are liable for the payment of CGT on the disposal of any immovable property owned by them in South Africa or on the disposal of an interest of at least 20% in the share capital of a company where 80% or more of the net asset value of the company is attributable to immovable property.
Individuals: Inclusion rate is 25% of capital gain.
Effective tax 10%