Buying and owning property in South Africa as a foreigner

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

Everything you need to know before buying real estate is included in our South Africa Property Pack

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THE AFRICANVESTOR

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 or are there restrictions compared to locals?

Foreigners can legally purchase property in South Africa with virtually the same rights as South African citizens.

The South African property market operates under an open ownership system where nationality does not restrict your ability to buy residential or commercial real estate. Foreign individuals and legal entities can acquire freehold title to properties without any nationality-based caps or quotas that exist in many other countries.

As of September 2025, the only notable exception involves agricultural land, where proposed limitations have been discussed but no formal restrictive laws have been enacted. The South African government has maintained a welcoming stance toward foreign property investment, recognizing its importance for economic growth and development.

The legal framework treats foreign buyers equally in terms of property rights, transfer processes, and ownership protections. This means you have the same recourse through South African courts and the same ability to sell, rent, or transfer your property as any local citizen would have.

However, illegal immigrants are prohibited from owning property, so foreign buyers must ensure they maintain legal status if they plan to reside in South Africa alongside their property ownership.

Are there differences in what types of property foreigners can own versus South African citizens?

There are minimal differences between what foreigners and South African citizens can own in terms of property types.

Foreigners can freely purchase residential properties including apartments, townhouses, single-family homes, luxury estates, and vacation homes. Commercial property ownership is also unrestricted, allowing foreign investors to buy office buildings, retail spaces, warehouses, and mixed-use developments throughout South Africa.

The primary distinction lies with agricultural land, where discussions about potential restrictions have emerged but no concrete limitations have been implemented as of September 2025. This means foreigners can currently still purchase farms, agricultural plots, and rural land, though this area warrants careful monitoring for future policy changes.

Sectional title properties (similar to condominiums), freehold properties, and leasehold arrangements are all accessible to foreign buyers. You can also purchase properties in security estates, golf estates, and lifestyle developments that are popular among both local and international buyers.

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

Do you need a visa, residency permit, or permanent residency to buy or own property as a foreigner?

No visa, temporary residency permit, or permanent residency is required for foreigners to buy or own property in South Africa.

This represents one of the most liberal property ownership policies in Africa and many parts of the world. You can purchase South African real estate while residing in your home country and maintain ownership indefinitely without any residency requirements.

However, it's crucial to understand that property ownership does not grant you residence rights or visa privileges in South Africa. These are completely separate legal processes. If you wish to live in South Africa alongside your property ownership, you must apply for the appropriate visa or residency permit through South African immigration authorities.

The separation between property ownership and immigration status means you can be a property owner while visiting South Africa on tourist visas, business visas, or any other temporary arrangements. Your property ownership rights remain intact regardless of your immigration status, as long as you maintain legal entry when visiting the country.

This policy makes South Africa particularly attractive for international investors seeking portfolio diversification or holiday home ownership without the complexity of residency requirements that other countries impose.

Must you be physically present in South Africa to complete a property purchase, or can it be done remotely?

Physical presence in South Africa is not required to complete a property purchase - the entire transaction can be handled remotely.

The remote purchase process works through a power of attorney arrangement where you grant legal authority to a local conveyancer or attorney to act on your behalf. This power of attorney must be properly notarized and authenticated according to South African legal requirements, but can be executed from your home country.

Your appointed conveyancer will handle all aspects of the transaction including property inspections, document signings, fund transfers, and registration with the Deeds Office. They can also coordinate with real estate agents, sellers, and other parties throughout the purchase process while you remain abroad.

The key requirement for remote transactions involves compliance with South African Reserve Bank exchange control regulations when transferring purchase funds into and out of the country. Your conveyancer will guide you through these requirements to ensure all fund transfers are properly documented and approved.

Many foreign buyers successfully complete purchases remotely, particularly for investment properties or when they plan to take possession at a later date. However, some buyers prefer to visit the property in person before finalizing the purchase, even though it's not legally required.

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What is the exact step-by-step process to buy property in South Africa as a foreigner, and which documents are required?

The South African property purchase process follows a standardized procedure that typically takes 8-12 weeks from offer acceptance to transfer completion.

1. Property Search and Selection: Work with a registered real estate agent to identify suitable properties and conduct initial viewings or virtual tours.
2. Offer to Purchase: Submit a written offer through your agent, including purchase price, conditions, and timeline. This becomes legally binding once accepted by the seller.
3. Appoint a Conveyancer: Engage a licensed conveyancing attorney who will handle all legal aspects of the transfer process.
4. Due Diligence Period: Your conveyancer conducts title deed searches, verifies property ownership, checks for municipal rates arrears, and ensures no legal impediments exist.
5. Secure Financing: If required, finalize mortgage approval with a South African bank or arrange international fund transfers for cash purchases.
6. Document Preparation: Your conveyancer prepares all transfer documents and coordinates with the seller's attorney.
7. Fund Transfer: Transfer purchase funds to your conveyancer's trust account, ensuring compliance with Reserve Bank regulations.
8. Registration at Deeds Office: Your conveyancer submits all documents to the relevant Deeds Office for final registration and transfer of ownership.

Essential Documents Required:

• Valid passport with certified copies
• Proof of residential address (utility bill or bank statement from home country)
• Comprehensive proof and source of funds documentation
• South African Revenue Service (SARS) tax number registration
• Bank reference letter from your home country bank
• Reserve Bank certificate for foreign exchange compliance
• Employment verification and income statements (for mortgage applications)
• Corporate documentation if purchasing through a legal entity

Is it mandatory to use a lawyer or conveyancer, and what role do they play in the transaction?

Using a licensed conveyancer (property transfer attorney) is mandatory for all property transfers in South Africa.

Conveyancers are specialized attorneys who hold specific licenses to handle property transfers and must be registered with both the Law Society and the Property Practitioners Regulatory Authority. You cannot complete a property transfer without their involvement, as they are the only professionals legally authorized to register ownership changes at the Deeds Office.

Your conveyancer's responsibilities include conducting comprehensive title deed searches, verifying the seller's legal right to sell, checking for any bonds or encumbrances on the property, ensuring municipal rates and taxes are current, and confirming compliance with all zoning and building regulations. They also handle the complex paperwork required for foreign buyer transactions, including Reserve Bank compliance documentation.

For foreign buyers, conveyancers provide additional services such as explaining South African property law, facilitating remote transactions through power of attorney arrangements, coordinating with international banks for fund transfers, and ensuring all exchange control regulations are properly followed.

The conveyancer's fees typically represent 8-10% of the purchase price and cover all legal costs, transfer duties, deeds office fees, and related expenses. While this may seem substantial, their expertise is essential for navigating South Africa's property transfer system and protecting your investment.

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

Can foreigners obtain mortgages in South Africa, what are the usual conditions, interest rates, and tips to get approved?

Foreigners can obtain mortgages from South African banks, though conditions vary significantly between resident and non-resident borrowers.

Non-resident foreign buyers typically qualify for financing up to 50% of the property value, requiring a minimum 50% cash deposit. Resident foreigners (those with valid work permits or residency status) may qualify for up to 75% financing, similar to South African citizens.

As of September 2025, mortgage interest rates for foreign buyers range from 11.5% to 14% annually, depending on the bank, loan amount, and borrower profile. Major banks including Standard Bank, ABSA, FNB, and Nedbank all offer foreign buyer programs, though each has specific criteria and documentation requirements.

Key approval requirements include demonstrating stable income at least three times the monthly mortgage payment, providing comprehensive bank statements for the previous 12 months, obtaining credit reports from your home country, and showing proof of employment or business ownership. Banks also require substantial documentation of the source of your deposit funds.

Tips for mortgage approval success: maintain excellent credit history in your home country, prepare comprehensive financial documentation well in advance, work with mortgage originators who specialize in foreign buyer transactions, and consider making a larger deposit to improve approval chances. Some banks also prefer borrowers who maintain South African bank accounts or have existing relationships with the institution.

What are all the taxes, fees, and ongoing costs involved when buying, owning, and later reselling a property?

The transfer duty structure operates on a progressive scale: properties up to ZAR 1,000,000 are exempt, 3% for the portion from ZAR 1,000,001 to ZAR 1,375,000, 6% for ZAR 1,375,001 to ZAR 1,925,000, 8% for ZAR 1,925,001 to ZAR 2,475,000, 11% for ZAR 2,475,001 to ZAR 11,000,000, and 13% for amounts exceeding ZAR 11,000,000.

Ongoing ownership costs include municipal property taxes (rates) calculated on municipal property valuations, which are typically lower than market values. Utility costs for electricity, water, and refuse removal vary by municipality and usage. Security estates and complexes charge additional levies for maintenance, security, and communal facilities.

Upon resale, you'll pay capital gains tax on any profit, calculated as the difference between purchase price (plus improvements) and sale price. Foreign owners must register for a South African tax number and file annual tax returns if they earn rental income from their properties.

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.

How does the South African tax system treat foreign buyers, especially regarding rental income and capital gains?

The South African tax system treats foreign property owners the same as local residents for income and capital gains tax purposes.

Foreign property owners must register for a South African tax number with the South African Revenue Service (SARS) before completing their property purchase. This tax number is required for the property transfer process and ongoing tax compliance.

Rental income from South African properties is subject to South African income tax at progressive rates ranging from 18% to 45%, depending on your total annual income including worldwide earnings. You can deduct legitimate property-related expenses such as maintenance, insurance, property management fees, and depreciation allowances.

Capital gains tax applies when you sell your property, calculated at 18% for individuals (or 45% for companies) of the taxable capital gain. The taxable gain is 40% of the total capital gain for individuals, meaning an effective rate of 7.2% for most individual sellers. You can deduct the original purchase price, transfer costs, and capital improvements from the sale price to determine the gain.

South Africa has double taxation agreements with over 80 countries, which may help you avoid being taxed on the same income in both South Africa and your home country. However, you should consult with tax professionals in both jurisdictions to understand your specific obligations and any available tax credits or exemptions.

Which cities or regions are most popular with foreigners, and why do they prefer those areas?

Cape Town dominates foreign buyer preferences, capturing approximately 60% of international property investments in South Africa.

Cape Town's appeal stems from its Mediterranean-style climate, world-renowned natural beauty including Table Mountain and pristine beaches, established wine regions, excellent infrastructure, and strong tourism industry supporting rental yields. The city offers diverse property options from Atlantic Seaboard luxury apartments to Constantia wine estate homes, with prices ranging from ZAR 2 million for entry-level apartments to ZAR 50 million+ for luxury estates.

Johannesburg attracts foreign buyers seeking business-focused investments and long-term rental income opportunities. As South Africa's economic hub, Johannesburg offers steady rental demand from corporate executives, expatriate workers, and young professionals. Popular areas include Sandton, Rosebank, and Melrose, with property prices typically 30-40% lower than equivalent Cape Town locations.

Durban appeals to foreign buyers interested in coastal lifestyle properties and holiday homes. The city's subtropical climate, Indian Ocean beaches, and lower property costs compared to Cape Town make it attractive for both investment and personal use. The Golden Mile and Umhlanga areas are particularly popular with international buyers.

The Garden Route region, including towns like Knysna, Plettenberg Bay, and Hermanus, attracts foreign buyers seeking retirement destinations or holiday homes in scenic coastal settings. These areas offer relatively affordable property prices combined with high-quality lifestyle amenities and natural attractions.

What are the latest insights on livability, rental yields, tourism numbers, and capital appreciation forecasts by area?

Cape Town leads in both livability rankings and capital appreciation potential, with property values increasing 8-12% annually in prime areas as of September 2025.

Cape Town's rental yields vary significantly by area and property type: Atlantic Seaboard luxury apartments generate 4-6% gross yields, City Bowl areas achieve 6-8% yields, and outlying areas can reach 8-10% yields. The city benefits from strong international tourism, with over 2.5 million foreign visitors annually supporting short-term rental markets in areas like V&A Waterfront, Green Point, and Sea Point.

Johannesburg offers the most consistent long-term rental yields in South Africa, with Sandton and Rosebank areas generating 8-12% gross yields due to steady corporate demand. The city's property market shows more moderate capital appreciation of 5-8% annually but provides reliable rental income throughout the year, unlike seasonal coastal markets.

Durban's property market reflects its tourism seasonality, with rental yields ranging from 7-9% annually but concentrated during summer months and holiday periods. The city received approximately 1.8 million international visitors in 2024, supporting both long-term and holiday rental markets along the Golden Mile and Umhlanga corridor.

Garden Route markets show strong lifestyle appeal but more modest financial returns, with rental yields typically 5-7% and capital appreciation following national averages of 6-8% annually. These areas benefit from domestic tourism and attract buyers prioritizing quality of life over maximum returns.

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

What are the most common mistakes and pitfalls foreigners face when buying property in South Africa and how can they avoid them?

The most common mistake foreign buyers make is failing to conduct proper due diligence on title deeds and property ownership history.

• Inadequate Title Verification: Some properties have complex ownership histories, informal settlements, or boundary disputes that aren't immediately apparent. Always ensure your conveyancer conducts comprehensive title searches and property inspections before finalizing any purchase.
• Exchange Control Non-Compliance: Many foreign buyers underestimate South African Reserve Bank exchange control requirements, leading to complications when trying to repatriate funds after property sales. Work with experienced conveyancers who understand these regulations and maintain proper documentation from the initial purchase.
• Hidden Cost Underestimation: Foreign buyers often focus only on purchase price and transfer duties while overlooking ongoing costs like municipal rates, body corporate levies, insurance, and maintenance. Budget for total ownership costs, not just acquisition expenses.
• Inadequate Professional Selection: Choosing inexperienced or unqualified real estate agents, conveyancers, or property managers can lead to significant problems. Always verify professional credentials, check references, and work with practitioners who have proven experience with foreign buyer transactions.
• Currency Risk Ignorance: Fluctuating exchange rates between your home currency and the South African Rand can significantly impact your investment returns. Consider currency hedging strategies or factor exchange rate volatility into your investment calculations.

To avoid these pitfalls, engage qualified professionals early in the process, maintain detailed documentation of all transactions and fund transfers, budget conservatively for all costs, and take time to understand South African property law and regulations. Consider visiting potential properties in person before purchasing, even though remote transactions are possible, to better understand local market conditions and property standards.

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. OOBA - Foreigners Buying Property in South Africa
2. The Africanvestor - Foreign Buyer Guide
3. Malherbex - Foreigners Guide to Buying Property
4. Black Pen Immigration - Complete Foreign Buyer Guide
5. The Africanvestor - South Africa Real Estate for Foreigners
6. Bissets - Foreign Buyers Guide
7. Nedbank - Property Investment for Non-Residents
8. AB Gross - Foreigners Property Guide