A foreign investor’s guide to the South African property market
With reports of foreign memos of warning being issued to our presidency to act against corruption and ongoing concerns around the solvency of our national power station, investing in South African real estate might not be high up on foreign investors’ to-do lists right now. However, considering the political turmoil that is running rampant across the globe, South Africa does still hold some of the more promising growth potential for foreign investors.
Given the sentiment of our current market, this gap to purchase at affordable rates is closing fast. Most other industry experts share this opinion that the real estate market will take a positive turn post-election, correcting the house price curve and yielding growth for all who were wise enough to invest now. In fact, after reviewing data from our national deed’s office, Lightstone Property predicts that house price growth has the potential to climb to 4.5% and beyond by the end of the year.
An uncomplicated process
What’s more, real estate investment for foreigners is relatively uncomplicated in South Africa. According to bond originator BetterBond, tax on the profit of the sale of a property is calculated according to the local tax laws of the country to which a seller hopes to transfer the funds. When applying for funding through a local financial institution, foreigners will typically be granted up to half the purchase price. The rest of the funds must be sourced from income generated abroad.
According to BetterBond, to receive more than half the purchase price, a temporary residence permit with a remaining term of three years must be presented. Most financial institutions will also require that the buyer reduce the outstanding loan amount to less than half of the original amount before returning to their country of origin, and will only grant the loan if the buyer banks with the particular bank they are applying to while they are in the country.
In my opinion, there has not been a better time to invest in South Africa than right now. I would encourage all foreign investors to get in touch with both a global real estate brand and a bond originator in order to seriously evaluate the possibility of owning property on our shores.
Source: bizcommunity.com
