Resicom – Holiday Investment – 04-21 – LB

The Europe of Africa

A popular emigration destination, South Africa can provide a European-style lifestyle for an affordable price. The legacy of British rule is still very much alive within the nation’s passion for cricket, rugby and football, and is also evident through distinct similarities in parliaments, property laws and banking systems.

However, there are also clear differences. South Africa enjoys 8.5 hours of sunshine daily in comparison to the UK’s 3.8, and a pint can be bought for a mere 80p, epitomising the affordable day to day living costs that South Africa offers.

Property prices have yet to recover from the boom years of 2000-2006, despite the boost of the World Cup. Rates are currently rising at two to three per cent, just below inflation.

Cape Town is the location favoured by most British expats. It offers a range of different property styles, with the Atlantic Seaboard boasting prime real estate offerings with boutique marina developments. Prices start at approximately £500k.

The famous V&A waterfront proposes a more affordable option, with two bedroom apartments beginning in price at £198k. Even more economically attractive is the Eastern Cape, where Jeffrey’s Bay, Cape St Francis and Port Elizabeth are located. Gated communities and family properties can be purchases for £70k plus. The leafy suburb of Constantina is just outside the city, but a mere few minutes’ drive away, and is also reasonably affordable.

For a quieter offering, the Lower South Coast of KwaZulu-Natal has potential, with a selection of beaches, gold and a mountain backdrop.

Reflecting its similarities to the UK, South Africa uses a very similar buying process. Once contracts are exchanged the buyer is unable to pull out without losing their deposit. Providing you do not possess a criminal record, there will be no restrictions on foreign investment. Transfer and mortgage documents can be signed at a South African embassy or the offices of a notary public. Sellers will be required to pay agents fees which are usually subject to VAT, although VAT will otherwise only be applicable if the seller is a VAT vendor. Otherwise, transfer duty will be applicable.

Transfer tax depends on the property price, with no duty payable on property costing less than ZAR500K (£38K). Between ZAR500K and ZAR1 million it’s five per cent and from ZAR1 million it’s eight per cent.

Non residents of South Africa who do not have a permanent residence will be granted a 90 day visa after buying a property with cash, and may be offered potential extensions for each visit. Those who are intending immigrantion may qualify for a mortgage of up to 50 per cent of the property they wish to buy.


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