South Africa
Beautiful beaches, blue skies and one of the best value property markets in the world.
Buying Guide
Funding
SA Market
South African residential property has grown by an average of 32% p.a. over the past year, with some sectors (golf /wine/ retirement estates) experiencing much higher returns. In addition to the 'facts and figures' Cape Town with its proximity to the Winelands and Garden route was recently voted as the second best place in the world to buy property by Channel 4’s TV programme “ A Place in the Sun”.
This increase in awareness has created a very active overseas buyers market for residential property. With the low cost of living, easy lifestyle, stunning scenery and Mediterranean climate , South Africa is fast becoming home to a large number of British expatriates getting away from the Northern Hemisphere winters.
Although property price rises have increased dramatically over the last year, they are still a fraction of comparable property in Europe and there are still bargains to be found. The revelation that the 2010 Soccer World Cup is to be hosted by South Africa means that the country is set for yet another 5 years of economic growth and investment opportunity which will have positive implications for years to come.
With 3 bedroom, detached houses comfortably available for as little as £85,000, there are options for everybody to participate in the lifestyle and financial opportunities that South Africa offers.
In SA, the Western Cape's climate, scenery and first world infrastructure make it the most visited province within SA. Being the cultural and holiday destination of the country creates a wonderfully relaxed and friendly atmosphere that is enjoyed by both the locals and visitors alike.
Source - SA Tourist Board
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Buying Guide
The most important thing for any foreign (non-resident) buyer to know about purchasing property in South Africa is that there are no restrictions on foreign ownership.
It is perfectly legal to bring in, and take out, foreign currency, including any gains that have been made on that investment, less Capital Gains Tax as anywhere else at 10%.
Any overseas buyer must be aware that in SA, once you sign the initial ‘Offer to purchase' or ‘Sale Agreement', you have entered into a legally binding contract to buy that property. Once both parties have signed this, neither party can withdraw without incurring legal consequences. This very easy process prevents ‘gazumping’. So, it is vitally important that all research has been done before you enter into this agreement.
Overseas buyers can borrow a maximum of 50% of the value of their property from a South African Bank. We can discuss funding options with you in more detail should you wish to proceed.
There are only 2 additional costs associated with buying a property. The first is Transfer Duty that is only applicable on re-sale properties, and is approximately 8% of the purchase price. The 2nd are the legal costs that will amount to approximately 1%. If you are buying off-plan, directly from a developer, than there are no transfer duties payable. The agent's fees are paid by the seller.
Buy-to-let investments in South Africa are also available to non-residents, although you must be aware that income tax could be payable if the income thresholds are crossed.
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Funding
For UK residents we can provide the following options;
- 50% mortgages in Rand
- Re-mortgages on UK properties
With the house price movements of the last few years, many UK home owners now have a substantial gap between what they owe as a mortgage on their property and what that property is now probably worth in today's UK market.
In considering releasing some of this equity to finance the purchase of a South African property, you are not alone, with many UK lenders reporting that the purchase of a property abroad is cited by the majority of borrowers, as the reason for re-mortgaging their home in Britain.
When considering such an important step as a re-mortgage, it is essential that you not only have access to the right information, but also the impartial and unbiased mortgage advice that will help you make the right decision. These are both available through Homesearch Mortgages
Overseas mortgages are not regulated by the Financial Services Authority.
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