Although South African property laws are widely regarded as progressive and encouraging to foreign investors, buyers from overseas can be surprisingly ignorant about the terms and conditions under which they own their properties, says Lanice Steward, MD of Anne Porter Knight Frank.

In particular, Steward says she has more than once had to remind non-resident owners that if they sell any property at a price of R2 million or more, they (or their attorneys) have to pay capital gains tax of 5% of the price to SARS on transfer.

For a property owned in a company the capital gains tax is 7,5% and it’s 10% for a trust.

“Non-residents should register with SARS and get income tax numbers when they decide to sell. Once this is done non-resident sellers can apply to SARS for their capital gains tax to be calculated on the individual rate (5%). If sellers contact SARS timeously, they will be given tax numbers if they don’t already have them, and can then apply for re-assessments of capital gains on their properties.

“The savings can be very significant,” says Steward.