Selling your South African property when you live overseas

You can own and sell South African property while living anywhere in the world. There is no restriction on foreign ownership of residential property here. What changes when you are not resident is the tax mechanics, how you sign, and how the money reaches you — and each of those has a way of surprising people at the worst moment.

The withholding tax that catches people out

Section 35A of the Income Tax Act says that when a non-resident sells South African property for more than R2 million, the buyer — in practice the conveyancer — must hold back part of the purchase price and pay it directly to SARS.

The important thing to understand: this is not an extra tax. It is a prepayment against whatever capital gains tax you actually owe. If the withheld amount is more than your real liability — and it very often is — the difference comes back to you when your South African tax return is assessed.

On a R3 500 000 sale by an individual, 7.5% is R262 500 held back at transfer. If your actual capital gains tax turns out to be R40 000, the rest is refunded — but not for months. Plan your cash flow around the withheld figure, not the refunded one.

Signing from another country

You do not have to fly back. There are two routes, and getting the formalities wrong is the most common reason an overseas transfer stalls.

1. Sign the documents yourself abroad. Your signature must be witnessed and authenticated — usually a notary public in the country you are in, plus an apostille if that country is party to the Hague Convention, or authentication at a South African embassy or consulate if it is not.
2. Give someone here a special power of attorney to sign on your behalf. The power of attorney itself has to be authenticated the same way, and it must be specific to this property and this sale.

Either way, allow weeks rather than days. Documents get returned for a missing stamp far more often than anyone expects, and each round trip costs you a fortnight.

Getting the money out

Proceeds can be transferred abroad, but through an authorised dealer — a South African bank with an exchange control desk — and with the right paperwork. What you will be asked for depends on how you came to own the property: whether the original funds were introduced from abroad through normal banking channels, whether the title deed was endorsed non-resident, and whether you formerly lived here and left.

This is genuinely a question for your bank's exchange control desk and your tax practitioner, not for an estate agent. What I would say is: start that conversation before you accept an offer, not after. It is the step most likely to add a month to your timeline, and it is entirely front-loadable.

You still need a South African tax number

Non-resident sellers need to be registered with SARS for the sale to be processed and for the withheld amount to be credited to you. If you have not filed here in years, or never had a number, that registration needs starting early. It is administrative rather than difficult, but it is not quick.

If you are also buying here

Plenty of overseas owners sell one property and buy another — smaller, better located, easier to let. A few things differ when you buy as a non-resident:

• You can buy residential property in your own name. There is no additional foreign buyer duty in South Africa, unlike several other markets.
• If you borrow from a South African bank as a non-resident, expect to be limited on how much you can finance locally, with the balance brought in from abroad. Your bank will give you the current position.
• Bring the funds in through normal banking channels and keep the record. It is what makes taking the money out again straightforward later.
• Transfer duty, conveyancing and the buyer's costs work the same for you as for a resident buyer.

What actually helps

1. Talk to your bank's exchange control desk before you list, not after you accept an offer.
2. Register with SARS, or check your existing number is active, at the same time.
3. If the section 35A withholding will clearly overshoot your real liability, apply for the directive early.
4. Decide now whether you are signing abroad or giving a power of attorney, and start the authentication.
5. Budget on receiving the price less the withholding, and treat any refund as a bonus that arrives later.

None of this is a reason not to sell from abroad. It is a reason to start the paperwork eight weeks before you think you need to.