Can foreigners buy property in South Africa in 2025?

Authored by the expert who managed and guided the team behind the South Africa Property Pack

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THEAFRICANVESTOR

A team specialized in real estate investing in African countries.

We are a team of financial experts, legal professionals, developers, and local real estate specialists dedicated to helping people like you avoid mistakes when investing in real estate in a foreign place, particularly in South Africa. If you'd like to learn more about us, you can check our presentation page.

Can foreigners legally buy property in South Africa in 2025, and are there any restrictions based on nationality?

Yes, foreigners can legally purchase and own property in South Africa in 2025 with no general restrictions based on nationality.

The South African property market remains fully open to international buyers for both residential and commercial properties. The only proposed limitations involve agricultural land, though these haven't been enacted as of June 2025. Both individual foreign nationals and foreign-registered companies can acquire property, provided they comply with South African law and exchange control regulations.

Unlike some countries that restrict foreign ownership by nationality or impose quotas, South Africa treats all foreign buyers equally regardless of their country of origin. Whether you're from the United States, United Kingdom, China, or any other nation, you have the same property ownership rights as South African citizens for residential and commercial real estate.

The Western Cape province, particularly Cape Town and its coastal suburbs, sees the highest concentration of foreign buyers, with 40% of luxury properties above R10 million purchased by international investors. Gauteng province, including Johannesburg and Pretoria, attracts the highest absolute number of foreign buyers, especially from other African countries.

It's something we develop in our South Africa property pack.

Do you need to be a resident or have a specific visa status to own property in South Africa as a foreigner?

No residency or specific visa status is required to own property in South Africa as a foreigner.

You can purchase property as a tourist, business visitor, or non-resident without any visa requirements. However, it's crucial to understand that property ownership does not grant you any residency rights or visa privileges in South Africa. Unlike countries with "golden visa" programs, South Africa maintains a clear separation between property ownership and immigration status.

This means you can own multiple properties in South Africa while living abroad and visiting only occasionally. Many foreign property owners use their South African homes as vacation properties or rental investments while maintaining their primary residence in their home country. The lack of residency requirements makes South Africa particularly attractive for international investors seeking portfolio diversification.

If you do wish to live in South Africa, you'll need to apply for the appropriate visa or permit through standard immigration channels, completely separate from your property purchase. Common options include retirement permits for those over 55, business permits for entrepreneurs, or critical skills visas for qualified professionals.

Can you buy property in South Africa without being physically present in the country during the process?

Yes, you can complete the entire property purchase process in South Africa without being physically present in the country.

The South African legal system accommodates remote property transactions through power of attorney arrangements and authenticated documentation. You can appoint a trusted representative, typically your conveyancing attorney, to act on your behalf throughout the purchase process. All necessary documents can be signed in your home country and authenticated through apostille or notarization processes recognized by South African authorities.

Modern technology has further simplified remote purchases. Virtual property viewings, digital document signing (where legally acceptable), and electronic funds transfers mean you can manage most aspects of the transaction from abroad. Your appointed conveyancer will handle the registration at the Deeds Office and ensure all legal requirements are met without your physical presence.

Many international buyers successfully purchase South African property while never setting foot in the country during the transaction. This is particularly common among investors buying rental properties or those purchasing vacation homes for future use. However, it's advisable to work with reputable professionals and potentially visit the property before finalizing the purchase if possible.

What's the step-by-step process for a foreigner to buy property in South Africa, and which documents are required?

The property purchase process for foreigners follows a structured nine-step procedure that typically takes 2-3 months to complete.

First, you'll find a suitable property and submit an Offer to Purchase (OTP) through an estate agent. Once accepted, both parties sign a formal sale agreement detailing all transaction terms. You'll then need to comply with FICA (Financial Intelligence Centre Act) requirements by providing specific documentation for identity verification.

The required documents include: a certified copy of your passport, proof of residential address not older than three months (utility bill or bank statement), proof of income or recent bank statements, and a South African tax number if one has been issued to you. If signing documents abroad, they must be notarized and apostilled according to the Hague Convention requirements.

Next, you'll need to open a South African bank account for payment transfers and potential mortgage repayments. If financing is required, you'll apply for a mortgage at this stage. The purchase funds must be transferred into South Africa following exchange control regulations. A conveyancer is then appointed to handle the legal transfer and registration at the Deeds Office. Finally, once all conditions are met and funds clear, the property is registered in your name and you receive the title deed.

The entire process requires careful coordination between multiple parties including estate agents, conveyancers, banks, and the South African Reserve Bank for exchange control compliance.

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Is it mandatory to hire a lawyer, and what role do conveyancers or estate agents play in the transaction?

Yes, hiring a conveyancing attorney is mandatory for all property transfers in South Africa, as only qualified conveyancers can register property at the Deeds Office.

What are the total costs involved—purchase price, transfer duties, VAT, legal fees, agent commissions, and resale taxes?

Total acquisition costs in South Africa typically add 8-10% to your property purchase price, with transfer duty being the largest component.

Transfer duty applies on a sliding scale from 0% for properties under R1.1 million to 13% for portions above R11 million. For example, on a R3 million property, you'll pay approximately R151,000 in transfer duty. VAT at 15% only applies when buying from a VAT-registered vendor (typically developers selling new properties), and in such cases, transfer duty doesn't apply - you pay one or the other, never both.

Conveyancing fees vary by property value but typically range from 0.5% to 1% of the purchase price plus VAT. On a R3 million property, expect conveyancing fees around R25,000-R35,000 including VAT. Additional costs include deeds office fees (approximately R1,000-R2,000), FICA compliance costs for document authentication, and bank charges for international transfers.

While estate agent commission of 5-7% is paid by the seller, this cost is often factored into the property's asking price. If you're obtaining a mortgage, add bond registration costs and bank initiation fees. For future resale, non-residents face a 7.5% withholding tax on properties sold above R2 million, credited against your final capital gains tax liability.

It's something we develop in our South Africa property pack.

Can foreigners get mortgages in South Africa, what are the typical rates and conditions, and how can you improve your chances?

Yes, foreigners can obtain mortgages from South African banks, but face stricter conditions than residents, with loans typically limited to 50% of the property value.

As of June 2025, the prime lending rate stands at 11.25%, with foreign buyers typically paying prime rate plus a risk margin of 0.5% to 2%, depending on their profile. This means effective rates of 11.75% to 13.25% for non-resident borrowers. The mandatory 50% deposit must be transferred from abroad through proper exchange control channels, not from funds already in South Africa.

Banks assess foreign applications more stringently, requiring comprehensive financial documentation including three months of bank statements, proof of income, employment contracts, and sometimes audited financials. The repayment-to-income ratio typically can't exceed 30% for non-residents, compared to up to 35% for locals. Most banks also require life insurance cover for the loan amount.

To improve your mortgage approval chances:

1. Open a South African bank account early and maintain regular transactions
2. Use a mortgage broker experienced with non-resident applications
3. Provide a larger deposit (60-70%) to negotiate better rates
4. Show stable employment with at least two years in your current position
5. Get pre-approval before making offers on properties
6. Consider applying at banks where you have existing international relationships
7. Ensure all documentation is properly authenticated and translated if necessary

How are property taxes, rental income tax, and capital gains tax handled for foreign owners?

Foreign property owners in South Africa face three main tax obligations: annual property rates, income tax on rental earnings, and capital gains tax upon sale.

Property rates are paid monthly to the local municipality based on the property's municipal valuation. Rates vary by location but typically range from 0.5% to 1.5% annually. For example, a Cape Town property valued at R3 million might incur annual rates of R24,000 to R36,000. These rates fund local services and are the same for foreign and local owners.

Rental income from South African property is taxed in South Africa regardless of where you live. Non-residents pay tax only on South African-sourced income at rates up to 45% for individuals. However, you can deduct legitimate expenses including bond interest, rates, insurance, property management fees, and maintenance costs. Many countries have double taxation agreements with South Africa, allowing you to claim credits for taxes paid.

Capital gains tax applies when selling your property, with non-residents effectively paying up to 18% on the net gain (40% inclusion rate × 45% tax rate). For properties sold above R2 million, buyers must withhold 7.5% of the purchase price as an advance payment to SARS, which is credited against your final tax liability. The actual gain is calculated as selling price minus purchase price and improvement costs.

We did some research and made this infographic to help you quickly compare rental yields of the major cities in South Africa versus those in neighboring countries. It provides a clear view of how this country positions itself as a real estate investment destination, which might interest you if you're planning to invest there.

What are the most common mistakes foreigners make when buying property in South Africa, and how can you avoid them?

The most dangerous mistake foreign buyers make is falling victim to sophisticated property scams and phishing attempts targeting international purchasers.

Scammers often intercept email communications and provide fake bank account details for deposits. Always verify banking details directly with your conveyancer via phone using independently sourced contact numbers, never rely solely on emailed instructions. Legitimate professionals will never pressure you for immediate payments or ask for deposits into personal accounts rather than trust accounts.

Another critical error is inadequate due diligence on property title and municipal compliance. Foreign buyers often skip comprehensive checks on zoning rights, building plan approvals, and outstanding municipal charges. Always insist on a full due diligence report including title deed verification, municipal clearance certificates, and confirmation of no unauthorized building work. Check for sectional title levy arrears if buying an apartment.

Underestimating total costs ranks as the third major mistake. Buyers budget for the purchase price but forget transfer duties, legal fees, and connection deposits for utilities. Create a comprehensive budget adding 10% for transaction costs plus a contingency fund. Additionally, many foreigners wrongly assume property purchase grants residency rights - it doesn't. Ensure you understand visa requirements separately from your property investment.

Finally, ignoring exchange control regulations can complicate fund repatriation later. Always transfer funds through authorized dealers and keep all documentation proving the source of funds for your purchase.

Which regions and cities are most popular among foreign buyers, and what's the breakdown of property prices in those areas?

The Western Cape dominates luxury foreign purchases while Gauteng attracts the highest volume of international buyers across all price segments.

In the Western Cape, foreign buyers pay an average of R2.7 million for properties, with hotspots including Cape Town's Atlantic Seaboard (Clifton, Camps Bay, Bantry Bay), the City Bowl (De Waterkant, Green Point), and coastal villages like Scarborough and Hermanus. The province captures 40% of all property sales above R10 million to foreign buyers. Specific areas show remarkable foreign interest - Scarborough sees 47% of sales to international buyers, while Bakoven reaches 44%.

Gauteng attracts more foreign buyers by volume, particularly from other African countries. Popular areas include Sandton (R2.5-5 million for apartments, R5-15 million for houses), Rosebank, Pretoria East, and Midrand. These buyers often seek investment properties or homes near business districts, with average purchases around R1.8 million.

KwaZulu-Natal's coastal areas attract holiday home buyers, with Durban beachfront apartments starting at R1.5 million and Ballito properties ranging from R2-6 million. The province offers better value than Cape Town while maintaining strong rental demand from domestic tourists.

It's something we develop in our South Africa property pack.

Which areas are best for living, long-term rental income, short-term rental returns, or capital growth, based on current data?

Cape Town excels for lifestyle and capital growth, while Johannesburg delivers superior rental yields, creating distinct investment strategies for different objectives.

What are the current liveability scores, rental yields, tourism inflow, and growth forecasts by region in South Africa?

Cape Town leads Africa in quality of life rankings while Johannesburg offers superior investment yields, creating a clear divide between lifestyle and returns.

Cape Town ranks as Africa's most liveable city and recently claimed the title of Time Out's best city globally for 2025. The city scores exceptionally on scenic beauty, outdoor lifestyle, and cultural amenities. However, this desirability translates to lower rental yields of 3-6% gross, as purchase prices have surged ahead of rental growth. Tourism remains robust with international arrivals recovering to 85% of pre-2020 levels, driving short-term rental demand particularly in summer months (October-March).

Johannesburg offers rental yields of 6-8% gross due to more affordable property prices relative to rental income. The city's economy drives consistent rental demand from corporate relocations and young professionals. While lacking Cape Town's scenic appeal, Johannesburg provides superior infrastructure, business opportunities, and investment returns. Areas like Sandton and Rosebank combine good yields with capital growth potential.

Growth forecasts for 2025-2027 project 5-8% annual appreciation in well-located Cape Town properties and 4-6% in Johannesburg, driven by infrastructure investments including Cape Town airport upgrades and Gautrain expansion. The Western Cape's semigration trend continues attracting domestic buyers, while Gauteng's economic recovery supports steady demand. Coastal towns show 6-10% growth potential as remote work enables lifestyle relocations.

Conclusion

This article is for informational purposes only and should not be considered financial advice. Readers are advised to consult with a qualified professional before making any investment decisions. We do not assume any liability for actions taken based on the information provided.

Sources

1. BusinessTech - Foreigners flocking to buy property in South African seaside villages
2. TheAfricanvestor - South Africa real estate for foreigners guide
3. IBN Immigration - Buying property in South Africa
4. Ooba - Foreigners buying property in South Africa
5. Adams & Adams - What non-residents should know before buying property
6. BusinessTech - Foreign buyers choosing provinces in South Africa
7. Daily Investor - Wealthy foreigners buying Western Cape properties
8. Global Property Guide - South Africa rental yields
9. TheAfricanvestor - South Africa real estate market analysis
10. Time Out - Cape Town crowned world's best city 2025