Whatshot
Legal Talk
Legal Talk
Date: 2013-02-13
To qualify for residency, one would need to be in possession of the relevant permit, be it a Work Permit, a Retired Persons Permit, or Business Permit, Temporary Residence Permits?or Visitors Permit.
The South African Revenue Services [SARS], who incidentally refers to foreigners as "non residents", unsurprisingly plays a significant role in the whole transfer process, just as it does, when the transfer involves South African citizens.
A non- resident can be a natural person, a company or a trust. That means a non-resident can buy property either in his own name or in the name of a legal entity.
One of the major differences between a "regular" transfer and one involving a non- resident, lies in the area of financing of the property. If the non- resident requires finance for example a loan or a bond in order to pay for the property, he must make application to the Reserve Bank for permission to obtain such finance.
In those instances the non- resident will not be allowed to obtain finance which is more than 50% of the value of the property. There are no restrictions if the non- resident wants to pay cash for purchase price. There must be proof that the monies paid by the non- resident came from outside the country.
A non- resident who has a work permit will not be affected by this restriction for as long as the work permit remains valid. When the non- resident sells or disposes of the immovable property he will be liable to pay CGT (Capital Gains Tax).
In this case the conveyancer will be required, in certain instances, to withhold tax of a certain amount from the proceeds of the sale from 5% to 10% depending on whether the seller is a natural person or legal entity and pay that over to SARS.
This is an advance payment of tax which will be payable by the non- resident seller to SARS, when he submits his tax return to SARS. Our Exchange Controls Regulations allow for any funds brought into the country to be repatriated together with any profit on resale of the property provided it meets with certain conditions.
Know your rights! Email fawzia@thelawdesk.co.za or call 031-5025670 for any legal assistance.