Foreign National Home Loan
Allows you to deposit additional funds into your Home Loan
Foreign National Home Loan
Foreigners, not resident in South Africa, who are keen to invest in property here, can do so individually or jointly, or by acquiring shares in a company that is the registered owner of a property.
Who can invest?
- Foreigners or non-residents can invest in property in South Africa as individuals, or through joint ownership or by acquiring shares in an entity that owns the property.
- Non-residents must transfer 50% of the purchase price or balance of purchase price via the Reserve Bank, from their own foreign bank to a designated account (which will usually be the trust account of the transferring attorneys) with a registered South African bank.
- All foreigners, specifical non-residents, must invest one rand in the country for every rand they need to borrow. The amount foreigners or non-residents can borrow is limited to 50% of the purchase price.
Tips for foreigners not resident in South Africa
- If you buy a property through an estate agent they must be a registered member of the Estate Agency Affairs Board with a valid Fidelity Fund Certificate.
- Once you make an offer to purchase and it is accepted, an agreement of sale will be drawn up for the buyer, seller and two witnesses to sign. This contract is legally binding. If either the buyer or seller cancels the agreement at the 11th hour, they can be sued for expenses incurred, such as wasted legal fees.
- Both the offer to purchase and the agreement of sale needs to be fully understood before they are signed and submitted. It’s best to seek independent legal advice if anything is unclear.
- Property in South Africa is sold voetstoots (as is). However, the buyer must be informed of all patent and latent defects in the property.
- Fixtures and fittings are automatically included in the sale of the property. For clarity, these can be listed in the agreement of sale.
- Electrical and beetle certificates are requiredto confirm that the electrical installation is compliant with statutory requirements and that the property is not infested by certain beetles. (The latter certificate is usually only compulsory in coastal regions.) Some regions require plumbing and gas certificates.
- All foreigners not resident or domiciled in South Africa must invest one rand in the country for every rand they need to borrow. The amount foreigners or non-residents can borrow is limited to 50% of the purchase price. Approval will be required by the exchange control authorities, which will depend on being able to prove the introduction to South Africa of an amount equivalent to the bond amount borrowed.
- Banks will only fund 50% of the purchase value of the property for non-residents. So foreign investors will either need to provide a 50% deposit, or pay cash and introduce the full amount into South Africa via the Reserve Bank to a designated bank account (which will usually be the trust account of the transferring attorneys) with a registered South African bank.
- The record of the deposit of the funds received from a foreign source is referred to as a “deal receipt” and must be retained by the purchaser as it is required for the repatriation of funds when the property is eventually sold.
- If it’s a joint applicationat least one applicant must earn a minimum of R25 000 per month, be 18 years or older and have a clean credit record.
