Real Estate Investor Magazine South Africa September 2016 | Page 43

to withhold a percentage of the purchase price to
ensure the full funds aren’t taken out of the country
without Capital Gains Tax being paid.

5%

if the Seller is a natural person

7.5%

if the Seller is a company

10%

if the Seller is a Trust

The conveyancing attorney will generally pay the
funds over to SARS, but if the buyer receives the full
purchase price directly and has been advised that the
withholding tax needs to be paid then he or she is
liable.
A foreign seller also needs to be aware that if the
intention is to take the proceeds of the sale out of
South Africa, he or she must be able to show the flow
of the foreign funds and have a Deal Receipt from
when the money was first brought into the country.
Lew Geffen, Chairman of Lew Geffen Sotheby’s
International Realty, says getting even one step of this
process wrong can jeopardise a sale.
“Working with an experienced estate agent can
make or break a sale, especially in regions like Cape
Town where according to a report just released by
FNB Property Economist John Loos, the percentage
of foreign property ownership is approximately 3%
higher than the national average of around 5%, and
the possibility of entering into this type of transaction
is more likely.
www.reimag.co.za

“The estate agent can play a significant role in
circumventing possible hiccups by being well-versed
in the legal requirements for these transactions as
well as by informing the conveyance attorney of the
circumstances of the sale as early as possible, but it’s
also important for local buyers and sellers to be aware
that there might be more challenges and what these
could be.
“It’s always a good idea for consumers to arm
themselves with as much information as possible, and
not be afraid to ask questions.”
Geffen says agents should advise attorneys if the
foreign party is leaving South Africa soon after
signing the offer to purchase, determine whether
both spouses want to own the property despite the
prevailing law of the land in which they reside and
advise both parties about withholding tax in order to
avoid confusion down the line.
Geffen concludes: “Although these additional
factors may seem daunting when added to an already
tedious ream of paperwork, as long as all procedures
are followed correctly and everyone is aware of the
requirements from the start, there’s no reason that
concluding a property transaction with a non-resident
should be anything but seamless.”

RESOURCES
Bartlett Communications
SEPTEMBER 2016 SA Real Estate Investor

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