South Africa

South Africa

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Garlicke & Bousfield Inc

1

Restrictions

Can anyone (including foreigners) own and occupy real estate in your jurisdiction (including shares in property owning companies)? Are there any restrictions?

Foreigners can own and occupy real estate and can hold shares in property owning companies. There are no restrictions on foreigners owning or occupying real estate

Are there restrictions on lending for the purchase of real estate by foreign companies? If so briefly give an outline?

There are no restrictions on lending for the purchase of real estate by foreign companies. However, each financial institution has its own lending criteria and conditions.

2

Taxes

Buying

Please provide a short summary of the fees and costs (including tax) relating to buying real estate in your jurisdiction.

Unless the Seller is a VAT Vendor and the purchase price includes Value Added Tax (VAT) at 14%, transfer duty is payable. Transfer duty is a tax levied on the value of the property acquired, and varies between 0% and 11% (and 13% on any amount exceeding R10M). Deeds office taxes and conveyancer’s fees in respect of the registration of the property in the Deeds Office and registration of the mortgage bond (if applicable) are also payable. Conveyancer’s fees are based on the recommended tariff prescribed by the Law Society.

Owning

Are there taxes applicable to owning real estate and can the burden of the taxes be passed to someone else (e.g. a tenant or an occupier - not being the owner)?

A property owner will be liable to pay rates to the local authority which are calculated by multiplying the market value of the property by a Cent amount in the Rand that a municipal council has determined. The property owner is liable for payment of the rates but could recover the amount from a tenant through a lease agreement. The sale of real estate will be a disposal for capital gains tax (CGT) which is payable by the owner. Foreign owners will be subject to a CGT withholding tax at 7.5% for natural persons, 10% for companies, and 15% for trusts.

Tax Breaks

Are there tax breaks or other incentives for foreigners to buy real estate in your jurisdiction? If so what are they?

There are no tax breaks or incentives that apply to foreigners.

3

Title of Real Estate

How is the ownership of Real Estate evidenced in your jurisdiction?

The ownership of real estate in South Africa is evidenced by the registration of a title deed in the Deeds Office. There are 10 Deeds Offices in South Africa and each property in South Africa, based on the geographical location thereof, is registered in one of these offices.

Is it possible to keep the identity of owners of real estate confidential in your jurisdiction?

All documents in the deeds office are subject to the general right of inspection and are publicly available on request as well as electronically.

Need more information?

Contact a member firm:

Aletta de Lange
Garlicke & Bousfield Inc