South Africa continues to attract increasing numbers of foreign buyers, especially in the high-end market. Lightstone data shows that in 2024, foreign buyers accounted for 40% of all property purchases above R10 million, while the share of non-resident foreign buyers rose from 2.9% in 2019 to 3.7%. Favourable exchange rates, lifestyle appeal and strong returns continue to drive this demand.
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But purchasing property as a foreigner comes with specific legal, financial, and exchange control requirements that must be correctly managed to avoid delays, penalties, or difficulties repatriating funds in future.
Below is a consolidated guide outlining everything foreign buyers, property practitioners and developers must know.
1. Legal capacity to purchase property
According to the Conveyancing and Property Law team at Abrahams & Gross, foreigners may legally purchase property in South Africa, but this does not grant automatic residency or unrestricted access to the country.
Foreign buyers must still comply with:
Immigration Act 23 of 2002
– A valid passport
– A valid visa or residence/work permit
If a foreign buyer does not hold proper immigration documents, they may be prevented from purchasing property.
Purchasing via a foreign company or trust
If buying through a foreign entity, the company must be registered as a foreign external company under the Companies Act 71 of 2008.
Conveyancers are legally prohibited from transferring property to any foreign buyer or entity that has not complied with these requirements.
2. Exchange control rules (SARB Requirements)
Insights from Kagiso Mahlangu, Director: Head of Real Estate & Conveyancing at CMS South Africa and Fhumulani Denga, Senior Associate at CMS South Africa
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All foreign-funded property transactions are regulated by the South African Reserve Bank (SARB). Exchange control applies when:
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The buyer is not ordinarily resident in South Africa
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Funds originate from outside the country
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The purchaser is a foreign individual, company, or trust
Foreign funds must be recorded
The receiving bank must issue a deal receipt confirming the introduction of foreign funds. This is essential for:
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Repatriation of sale proceeds in future
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Repatriation of rental income
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Maintaining compliance with SARS
Without this documentation, a foreign buyer may not be able to take their money out of South Africa after resale.
3. Opening the correct bank account
Foreign buyers must open a non-resident bank account with a South African bank (unless they already hold a local account). The process:
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Transfer funds from an offshore account in the buyer’s own name
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Funds are converted into rand
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Funds are paid into the attorney’s trust account, not a developer or agent’s account
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Payment to the seller occurs once the property registers
If the buyer does not have a local account, funds may be sent directly to the attorney’s trust account, but strict FICA verification still applies.
READ: The essential legal checklist for SA property buyers
4. FICA Requirements for foreign buyers
To comply with the Financial Intelligence Centre Act (FICA), foreign buyers must submit:
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A certified passport copy
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Proof of address abroad
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Proof of source of funds (e.g., bank statements or employment contracts)
Requirements differ if the buyer is a foreign company or trust; the appointed conveyancer will specify additional documents.
5. VAT, Transfer Duty and other costs
Whether VAT or transfer duty applies depends on the seller:
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If the seller is a VAT vendor, the price usually includes VAT and no transfer duty is payable.
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If the seller is not a VAT vendor, the buyer must pay transfer duty to SARS.
Foreign buyers are also responsible for:
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Transfer attorney fees
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Bond registration fees (if financing is required)
South African banks may grant mortgages to foreign buyers, but a foreign bank cannot mortgage a South African property.
6. Signing transfer documents abroad
If the foreign purchaser is not in South Africa, transfer and bond documents must be signed:
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At a South African Embassy/Consulate, or
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Before a Notary Public abroad (may incur extra costs)
This ensures valid attestation of the buyer’s identity.
7. Risks to be aware of
Foreign buyers should be aware of:
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Exchange rate fluctuations affecting final repatriation value
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Delays when third-party payments trigger SARB review
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SARB loan applications that may take up to six weeks
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Inability to repatriate funds if documentation was incorrectly handled at purchase stage
Working with an experienced conveyancer is essential to avoid these risks.
8. Why proper compliance matters
While the process may seem complex, SARB and FICA regulations exist to:
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Protect South Africa’s foreign currency reserves
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Prevent money laundering
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Ensure proper tax and financial compliance
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Guarantee that foreign buyers can safely repatriate funds later
When handled correctly, foreign investment significantly benefits both the property sector and the national economy.
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South Africa remains a compelling destination for foreign property investment, but these transactions must be executed with high legal and financial accuracy.
By:
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complying with immigration, FICA and exchange control requirements,
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routing foreign funds correctly, and
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working with experienced conveyancing attorneys, foreign buyers can purchase with confidence - and property practitioners and developers can register sales smoothly and lawfully.
Please note that the required documentation may vary if the purchasing party is a foreign company or trust. In such case, the appointed conveyancer will provide specific guidance based on the nature of the purchasing entity.
While the exchange control process may seem cumbersome, it is intended to safeguard South Africa’s foreign currency reserves and ensure compliance with tax and regulatory frameworks. When handled correctly, foreign investment contributes significantly to the real estate sector’s growth and benefits both foreign investors, property developers and property practitioners. By collaborating with experienced conveyancers and adhering to SARB and South African Revenue Service regulations, property practitioners can register sales more efficiently, and foreign investors can invest confidently, knowing their funds are secure.
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