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Can I purchase a property in South Africa if I am a non-resident?
A non-resident of South Africa is a person (i.e. natural person or legal entity) whose normal place of residence, domicile or registration is outside the Common Monetary Area. The Common Monetary Area consists of South Africa, Lesotho, Namibia and Swaziland. Non-residents may purchase property in South Africa but in terms of Exchange Control Regulation 3.1 (f) they may not be granted any financial assistance - e.g. a home loan. However, the South African Reserve Bank will consider requests by non-residents for bond facilities not exceeding 100% of your borrowing base.
The "borrowing base" of a non-resident is the sum introduced into South Africa to fund the purchase of a property. For instance, if as a non-resident, you wanted to purchase a property in South Africa for ZAR600 000,00, provided you are able to bring ZAR300 000,00 into South Africa to effect the purchase, you would be able to apply to the Reserve Bank for permission to apply for a bond of ZAR300 000,00. In other words, 50% mortgage loans are available to non-residents. It must, however, also be borne in mind that the banks will only grant a bond of 50% of their valuation of the property, which in some instances might not equal 50% of the purchase price. All requests of this nature must be routed via a commercial bank and not directly with the South African Reserve Bank.
You would need to provide proof of the fact that the funds have physically come into the country (which can be done by the Transferring / Conveyancing Attorney), so that when the property is sold, the deposit plus profit can be released. The title deed will be endorsed "non-res". As a non-resident, you are not required to open a banking account in South Africa, although certain banks do insist on it, as this would facilitate the transferal of funds directly from your account abroad into your mortgage account in South Africa. If you open a banking account - particularly if an access facility is required for the capital paid off - then you would need to obtain an original letter of credibility from your bank.
As Exchange Control is complex, it is advisable for non-residents to consult with an ooba home finance expert, to guide you through the process.