There is significant foreign interest in the South African property market. We have identified some useful information for foreign buyers to be aware of when considering purchasing property in South Africa.

Property can be owned by individuals or by a juristic entity such as a company, close corporation or trust. If the juristic entity is registered in a foreign country, it must also be registered in South Africa.

Ownership of land is evidenced by a Title Deed, which is issued to the owner of the property and signed by the Registrar of Deeds. In South Africa, there is a Deeds Registry in each major centre and the head office is located in Pretoria. The seller of the property will ordinarily appoint a conveyancer who will draft documents that both parties will need to sign. Thereafter, the conveyancer will prepare the Deed of Transfer and have it lodged at the Deeds Registry for registration. Ownership of the property passes on the day of registration of the Deed of Transfer.

Securing the purchase price

Purchases in South Africa are typically secured by means of a banker’s guarantee payable to the seller’s conveyancer or any third party that has been nominated by the seller or his conveyancer. Guarantees that are issued from a foreign bank are usually not accepted by a conveyancer; therefore, foreign purchasers should obtain a guarantee from a South African bank. Alternatively, the foreign purchaser can pay the full purchase price to the conveyancer, who would then invest the amount pending registration of the transfer.

Interest gained on invested funds A conveyancer will place the received funds, which exclude costs and disbursements, into a separate trust account. The interest on this investment will accrue in part to the Attorney’s Fidelity Fund and in part in accordance with the sale

agreement. If the purchaser wishes to benefit from the investment, they must ensure that provision is made for this in the sale agreement.

Exchange control

The South African Reserve Bank has imposed regulations that govern the transfer of funds in and out of South Africa, referred to as exchange control. Any funds that a non-resident has introduced into South Africa in order to purchase a property must be disclosed to the relevant South African bank. This will allow a purchaser to convey the proceeds of a future resale of the property back to their overseas bank accounts. The banks act as an agent of the South African Reserve Bank and they will endorse the title deed with “Non-Resident” as a record that the funds were introduced from overseas.   

When a purchaser acquires the shares in a South African juristic entity in order to facilitate the purchase of property, they will need to have in their possession a document from any South African bank that confirms that they are transferring funds from abroad. 

Mortgage finance

A purchaser who is a non-resident may borrow funds via mortgage through a South African commercial bank.  This amount cannot exceed 50% of the purchase price for the property, unless it has been approved by the South African Reserve Bank. For every R1.00 deposited, you can apply for a loan of an equal amount.

Voetstoots This clause is introduced by sellers to avoid liability for latent or patent defects found on the property. It is advisable for a purchaser to inspect the property sufficiently to detect any patent or latent defects. The maxim is linked to the caveat “let the buyer beware”, thus indemnifying the seller from future damages claims if defects are discovered by the purchaser after registration. The Consumer Protection Act 68 of 2008 (“the CPA”) limits service providers or suppliers from relying on the voetstoots clause to escape liability of defects that said the supplier had been aware of but this would only occur where the CPA is applicable.


Possession of the property will typically coincide with occupation and is important because it usually entails the transfer of the benefits and risks of ownership. This means that risk can transfer to the purchaser before formal registration occurs in the Deeds Registry. We would therefore advise that a prospective purchaser should have the property insured from the date of possession.


Prospective purchasers should be aware that they are usually liable for the following costs:

The sale agreement should make provision for the payment of the various fees so that it is clear which party is liable.

Section 35A of Income Tax Act 58 of 1962 – Withholding Tax

There is an automatic withholding of tax which is levied by the South African Revenue Service (SARS) when a non-resident sells a property.

The following rates apply:

These amounts are payable to SARS within 28 days after transfer for non-resident purchasers.  The purchaser can apply to SARS directly for a directive which will state the exact amount of tax that is payable. When you liaise with your attorney, they will explain the relevant documents that are necessary and will be expected by SARS when applying for the directive.

This article is a general information sheet and should not be used or relied on as legal or other professional advice. No liability can be accepted for any errors or omissions nor for any loss or damage arising from reliance upon any information herein. Always contact your legal adviser for specific and detailed advice. Errors and omissions excepted (E & OE).

Written by: Orissa Ramesar (Candidate Attorney) and Andrea Tomassichio (Associate)

For more information please contact Andrea Tomassichio at or via:

Switchboard:   021 441 9800

Website: Bissets Whatsapp:  072 370 0416 – our Client Liaison, Tracy, will put you in contact with the relevant professional