Cavendish Brooke covers most areas of South Africa but we specialise in sourcing luxury properties in the Cape and Kwa-Zulu Natal provinces. We have many years of experience in these regions and have chosen to specialise here as they are the areas of South Africa that we know best and those that our clients most frequently ask us for.
As property finders we are not tax or legal specialists, but here is a brief outline of the buying process in South Africa and things to budget for when thinking about purchasing your property here:
Some interesting facts about South Africa
- South Africa is the most developed country on the African continent and produces a quarter of the GDP for the entire continent
- Capital = Pretoria (Tshwane)
- 80% Christian, 15% no religion
- South Africa has 11 officially recognised languages, including Afrikaans, English, Xhosa and Zulu
- Currency = Rand (ZAR), 1 Rand = 100 cents
- The British arrived in South Africa in 1806
- South Africa was relieved of apartheid legislation in 1991
- The first non-racial elections were held in April 1994 when Nelson Mandela became president
- Time = GMT + 2
Climate and Healthcare
South Africa enjoys a warm temperate climate with a large degree of regional variation. The Cape area has a Mediterranean-type climate with unpredictable rain and can be temperamental. The East Coast (Durban) is more sub-tropical and high humidity is not unusual. Inland the temperatures are more constant with warm/hot days and mild winters.
South Africa has a very high standard of healthcare with world-class surgeons. However this is limited to the major cities and private sector only and is very expensive. Rural hospitals lack resources and have very long waiting lists. HIV/AIDS is prevalent in South Africa with an estimated 11% of the population being affected.
Private healthcare/travel insurance is strongly recommended, especially if travelling to remote areas where often air evacuation can be the only option in medical emergencies. It is also advisable to consult your doctor regarding recommended vaccinations and protection against malaria.
Visas and Documentation
British nationals visiting for less than 90 days do not need visas. Extensions can be applied for. Please note that a clear page is required in your passport for the SA entry stamp. If you do not have a blank page, you will be denied entry.
UK driving licences are valid for up to 12 months after entry provided it carries a photograph and signature.
Passport theft is common so always carry photocopies of your passport with you.
The Buying Process
The sequence below will help you gain an insight as to how the process usually works:
1 - Appoint a solicitor to conduct the necessary searches and ensure that all the legal requirements are met. South Africa has one of the world's best deeds registration systems and a stringent legal system. We can recommend several local or UK based law firms who can assist you.
2 - Arrange your mortgage, or alternative finance, if you haven't already. We can help you with this. If you require a mortgage, only South African based lenders will offer terms and mortgages will only be Rand based. Foreigners can borrow 50% of the value of the property and as in the UK, a lender will require a survey and will insist on instructing the valuation from their own approved panel of surveyors/valuers. We would always recommend that you obtain an independent survey, even if you are not using a mortgage to purchase the property.
3 - Pay a deposit to secure the property and for it to be taken off the market - although this is not mandatory for every sale. Once paid, the deposit is usually non-refundable if you change your mind. The deposit will usually be 10% of the purchase price.
4 - Check and sign the preliminary sale contract. Your solicitor will guide you through this. It is usually at this stage that the deposit becomes payable and both sides are committed to the transaction.
5 - Calculate all the costs involved including estate agents fees, taxes, valuation, notary, administration and legal fees.
6 - Wait for your solicitor to complete legal investigations such as checking that the owner has the authority to sell, whether there's any outstanding debt on the property and if it has the full and correct title deeds.
7 - Arrange a date for completion with your solicitor/conveyancer and pay the balance of the purchase price to him before that date (as in the UK).
8 - Pay for the property and applicable taxes. It is a safe guide to assume an additional 10% in fees to cover purchase costs, stamp duty, etc.
9 - Title will be registered at the Land Registry and transferred into your name
N.B. Please be aware of the 'voetstoets' clause in South African purchase contracts. This literally means 'as it is' (Afrikaans) and means that the vendor bears no responsibility for the condition in which the goods are sold.
Tax and Legal
We at Cavendish Brooke International are not tax experts, however, we will be happy to introduce you to professionals who will be delighted to assist you and answer any questions you may have on this subject. The information below is offered merely as helpful notes and we strongly recommend you employ the services of professional tax advisers.
The taxes that could be due are:
- Rental Income Tax
- Capital Gains Tax
- Municipal/Local Taxes
- Estate Duty and Gift Tax – non-residents are liable on assets located in South Africa
The South African legal system is very different to the English system. However, provided that you make the necessary enquiries and checks you should have no concerns about buying in South Africa. To avoid complications and pitfalls, we strongly recommend that you employ Independent legal advice. We will be very happy to put you in contact with a panel of lawyers who are totally independent of any agents or developers.