Rainbow nation
 With its stunningly beautiful scenery, beaches, vineyards and agreeable climate, buyers are flocking to South Africa.
Published in Square Foot Magazine on 1 May 2006
Demand, both local and overseas, has stimulated development particularly in Cape Town and along the Atlantic seaboard. Average house price growth in South Africa in 2004 was over 32 per cent, peaking in September and October of that year at 35 per cent. Predictions for 2006 are lower, with figures of 10 and 15 per cent, although many experts argue this is just a natural slowdown as buying power catches up to prices, rather than a bursting bubble.
Why
- From an investment standpoint, South Africa is still a very attractive "get in early, get out early" market. Properties in Durbanville have seen the highest price increases across the region, with 53 per cent over the past year
- Nature and eco-tourism are booming, adding appeal to holiday homes and maintaining property values
How
- There are no restrictions on foreign nationals buying property, although the fact that you have bought in the country has no bearing on permanent resident applications
- Private sales are rare - buyers typically go through an estate agent who looks after the formalities like signing the contact and is paid by the seller. It is still important, however, to seek professional legal and accounting advice
- Associated costs include transfer tax (between five to eight per cent depending on the purchase price), legal fees (around one to two per cent) and mortgage costs (around 0.2 per cent)
- Non-residents still need to pay capital gains tax (CGT) when reselling, but may repatriate the initial investment as well as any profit less CGT overseas without restrictions
Anything else?
 If you decide to live in South Africa, make sure to look into the conditions for permanent residency. It may be possible to get a business permit for temporary residency, which is valid when acquiring an existing business or starting up a new one. However, there have recently been changes to the regulations relating to retiring to South Africa. In general, an income of R20,000 ($26,000) per month or a one-off investment of R7.5 million ($9.7 million) is needed, so find out what the latest regulations are before buying.
Holidaymakers intending to use their property once in a while can get a visitor's permit valid for up to 90 days.
PROPERTY AGENCIES
AIDA
+ 27 12 682 9600
www.aida.co.za
SA Home Traders
www.sahometraders.co.za
Seeff
+27 11 455 3966
www.seeff.com
LEGAL ADVICE
strb Smith Tabata Buchanan Boyes
+27 21 406 9100
www.buchananboyes.com
Woodhead Bigby & Irving Inc.
+27 31 360 9700
www.woodhead.co.za |
