by Club KLM
South African Property.
The country of South Africa provides a simple process for the residents and even non-residents to own a property; however it is always wise to know about the costs, conditions and rights, and for that matter this article will focus on the opportunity for non-residents to consider buying property in South Africa.
Real estate is without restrictions and non-residents can own property and get a mortgage. All foreign funds used for purchase of property must be declared however and documented. However, loans through South African financial institutions to legal aliens normally cover only 50% of the purchase price.
Although the Southern African market is dominated by a few property agents, you can search for real estate via the internet. Upon finding properties that are interesting to you, you can search property records at no cost with the Registrar of Deeds.
Property transaction fees usually include ten to twenty percent deposit plus attorney’s fees and registration fees. And the process, including verification of your identification documents and settlement of government duties, takes between six to eight weeks.
Addiitonally based on location and size of the property purchased you can expect that around 0.07% -0.4% of the market value of the property is to be remitted to the government in the form of property tax.
If you are considering purchasing property for the sake of renting it for income there are a couple of things that you need to be aware of in terms of taking on the role of landlord.
Rental deposit amounts must be stated in the contract, but there is no restriction on the amount. Landlords are required to invest the deposit in an interest-bearing account, and the rate must not be lower than that of a savings account. Within two to three weeks of the end of the lease, the landlord must return the deposit, with interest.
South African landlords are free to set and negotiate rent with their tenants. However, if your tenant feels they are being charged too much for a poor quality property, they can file a complaint with the Rental Housing Tribunal.
Additionally in South Africa the act of eviction follows a proper procedure. If a landlord wants his tenant to vacate the property, then he must obtain a summons from the court and the tenant has to respond to this summons within three days or vacate the property. Once the court has issued an eviction order, the tenant is given two weeks’ notice by the landlord along with the eviction order issued by the court to vacate the property.
As a side note Johannesburg offers by far the quickest growing market for rentals. Low rental yields at 13.25% while houses linger at 24.33%.