South Africa continues to attract international property investors seeking lifestyle, residential, and commercial opportunities in one of Africa’s most established real estate markets. While foreign nationals and non-residents may generally acquire property in South Africa, understanding the legal and regulatory frameworks that govern property ownership and transactions is imperative.
Can foreigners purchase property in South Africa?
According to STBB Director and experienced conveyancing attorney, Annetjie Coetsee, there is currently no legal limitation that outright prohibits foreign nationals or non-residents from owning immovable property in South Africa. Consequently, foreign purchasers may acquire residential, commercial, and other forms of property, subject to compliance with applicable laws.
‘Crucially, property rights are protected by section 25 of the Constitution, while the ownership of immovable property is formally transferred and recorded through registration in a regionally located Deeds Registry in accordance with the provisions of the Deeds Registries Act,’ Coetsee confirms.
Importantly, however, purchasing property does not confer citizenship or permanent residence. ‘Property ownership and immigration status are governed by separate legal frameworks. Purchasing property in South Africa does not, in itself, create a right to citizenship or permanent residence,’ explains the Helderberg-based real estate lawyer.
Although international purchasers represent a relatively small proportion of the country’s residential property market overall, they continue to play an important role, particularly in the luxury property sector. According to Lightstone Property’s analysis of residential transactions over the past decade, foreign buyers account for approximately 6% of residential transactions nationally. However, their presence increases significantly in the upper end of the market, representing approximately 15% of transactions between R4 million and R10 million, 26% of transactions between R10 million and R20 million, and a notable 39% of transactions exceeding R20 million. For Coetsee, these figures clearly suggest that ‘South Africa continues to attract meaningful foreign investment, particularly in premium property markets.’
Understanding exchange control requirements
The Exchange Control Regulations, issued under the Currency and Exchanges Act, regulate the movement of capital into and out of the Republic. While foreign nationals are free to purchase property, investors should ensure that acquisition funds are transferred through authorised dealers, typically South African commercial banks permitted to deal in foreign exchange.
For exchange control purposes, it is especially critical to distinguish between a ‘foreign national’ and ‘non-resident’. A foreign national may be regarded as a resident for exchange control purposes depending on their circumstances, while a South African citizen may be classified as a non-resident. ‘The applicable exchange control requirements are therefore contingent on an individual’s exchange control status rather than nationality alone,’ remarks Coetsee.
Significantly, international purchasers should retain documentary proof of inward fund transfers, which is generally required to repatriate the proceeds of a subsequent sale. ‘One of the most important practical steps in these transactions is keeping proof of the inward transfer of funds. Often, those records are essential when a non-resident later wishes to repatriate the proceeds after selling the property,’ says the real estate attorney.
SARB’s updated Balance of Payments reporting framework
In a bid to align with the International Monetary Fund’s Balance of Payments Manual, the South African Reserve Bank (‘SARB’) has amended and harmonised its Balance of Payments (‘BoP’) reporting codes, effective 11th August 2026. The changes form part of SARB’s updated Financial Surveillance reporting framework and affect how authorised dealers classify and report cross-border transactions, including those relating to immovable property.
Notably, the updated BoP reporting codes do not alter the legal position regarding foreign property ownership. ‘The new BoP reporting framework should not be interpreted as a restriction on foreign ownership,’ assures Coetsee. ‘It is an administrative reporting mechanism designed to standardise and improve the classification of cross-border transactions and support exchange control administration rather than to change the substantive law governing property ownership,’ she explains.
Importantly, the reporting classification records the nature and purpose of funds introduced into South Africa. As such, correct reporting assists in establishing that the investment originated offshore and supports future applications to repatriate the proceeds of a subsequent sale. Erroneous or incomplete reporting may result in delays, additional administrative requirements, or requests for further supporting documentation when funds are transferred abroad.
For Coetsee, foreign purchasers should engage both their bank and conveyancing attorney at an early stage to ensure the transaction is accurately reported from the outset. ‘Addressing reporting requirements at the beginning of the transaction is considerably simpler than attempting to rectify them years later,’ adds the STBB Director.
FICA compliance and source of funds
Property transactions in South Africa are subject to the Financial Intelligence Centre Act (‘FICA’), which forms part of the country’s anti-money laundering and counter-terrorist financing framework. Under FICA, conveyancing attorneys and estate agents that qualify as accountable institutions are required to verify the identity of their clients and apply appropriate due diligence measures.
International and non-resident purchasers should therefore be prepared to provide valid identification, proof of residential address and, where applicable, information relating to the source of funds used to finance the transaction.
‘FICA compliance is an integral part of the conveyancing process. Providing the required documentation as early as possible can avoid unnecessary delays,’ says Coetsee.
Tax registration
The South African Revenue Service’s recently updated validation rules reinforce the requirement for foreign resident sellers to provide a South Africa tax reference number for transfer duty submissions, regardless of the transaction value. Foreign resident purchasers, however, are not required to have a tax reference number for transactions below the R2 million threshold.
Accordingly, foreign purchasers should consult with their conveyancer at an early stage to establish whether SARS registration, verification, or other tax requirements must be satisfied before transfer can proceed.
‘Tax requirements can differ depending on the purchaser’s circumstances. Therefore, obtaining advice at an early stage helps ensure that any SARS requirements are addressed before they delay registration,’ explains the real estate lawyer.
Transfer duty
Transfer duty is a mandatory tax imposed under the Transfer Duty Act and is usually payable by the purchaser unless the transaction is subject to value-added tax. The applicable transfer duty rates, which apply equally to natural persons, juristic persons, and other entities, such as local and foreign trusts, are determined by legislation and increase on a sliding scale. For property acquisitions concluded on or after 1st April 2025, properties valued at R1.21 million or less incur no transfer duty.
Municipal compliance requirements
Before a transfer can be registered, section 118 of the Local Government: Municipal Systems Act typically requires the issuing municipality to provide a rates clearance certificate confirming compliance with all statutory requirements for transfer. In broad terms, a municipality may not issue the certificate unless the prescribed amounts that became due in connection with the property during the relevant statutory period have been paid or otherwise dealt with as permitted by law. These amounts may include property rates, municipal service charges, surcharges, and other municipal taxes.
In practice, failure to timeously obtain this certificate will undoubtedly delay lodgement in the Deeds Registry.
Transfer costs
As the transfer of ownership must be formally registered in the Deeds Registry by a duly admitted conveyancer, purchasers are usually responsible for the transferring attorney’s fees, Deeds Office charges, bond registration costs (inclusive of professional fees and separate Deeds Office charges), if applicable, and various other related costs associated with the transfer process.
‘Many international purchasers budget for the purchase price but overlook the additional costs connected to the transfer. Noting these costs from the outset allows buyers to plan appropriately,’ details Coetsee.
Tax considerations when selling property
As indicated, it is essential for foreigners and non-residents to understand the tax implications that may arise when they eventually dispose of South African property. Specifically, capital gains arising from the disposal of property may be subject to capital gains tax under the Income Tax Act.
In addition, where a non-resident sells a property for more than R2 million, section 35A of the Income Tax Act generally requires the purchaser – the conveyancer in practice – to withhold a portion of the purchase price and pay it to SARS on behalf of the seller. Failure to do so may attract penalties.
The current withholding rates are:
- 7.5% where the seller is a natural person;
- 10% where the seller is a company; and
- 15% where the seller is a trust.
Importantly, this withholding is not a separate tax. Rather, it is a mechanism for the collection of capital gains tax and therefore serves as ‘an advance payment towards the seller’s potential South African tax liability and may be credited against their final tax assessment,’ notes the experienced conveyancer.
Practical considerations for foreign purchasers and investors
Foreign investors and non-resident purchasers can minimise delays and administrative challenges by:
- Obtaining independent legal advice from a qualified conveyancing attorney;
- Ensuring that all acquisition funds are transferred through authorised banking channels and correctly reported for exchange control purposes;
- Retaining records of inward fund transfers and supporting banking documentation;
- Preparing FICA documentation in advance; and
- Obtaining tax advice where appropriate, particularly where the future disposal of the property is contemplated.
For Coetsee, careful planning at the beginning of the transaction is imperative to avoiding unnecessary costs and delays. ‘It goes without saying that engaging experienced legal and financial advisers can make the process considerably smoother,’ she says.
A market that remains accessible
An attractive destination for international investors, South Africa imposes no general prohibition on the ownership of property by foreigners or non-residents. While the property acquisition process is typically straightforward, compliance with exchange control requirements, FICA, tax obligations, and property registration procedures remains essential.
With appropriate professional guidance and a clear understanding of the law, foreign and non-resident purchasers can minimise avoidable legal, tax, and administrative risks with ease.
For expert legal assistance, contact our experienced real estate attorneys today.
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