Buying Property Abroad

Buying Property Abroad

SA Expat real estate purchasing guide worldwide

South Africans are increasingly looking for opportunities abroad, but for those looking to pack up and ship off entirely, the question remains which country allows the best opportunities for expats when it comes to property.

Rand Rescue takes a look at some options available to South Africans as well as the opportunities and pitfalls of buying property abroad.

Least restrictive countries for expats

One problem South African expats face in purchasing property abroad is the restrictions which limit purchasing of property.

Such restrictions generally relate to:

  • The citizenship status of the purchaser
  • Where the property is located within the country
  • The type of property you wish to purchase
  • The size of the property you wish to purchase
  • The purpose of the property you wish to purchase

International Living reports that most countries which allow foreigners to purchase property will require buyers to apply for permission from a governmental body before you should even consider purchasing property.

Then there are other restrictions as well. In Australia, for instance, permanent residents are allowed to purchase most types of property, but foreign nationals (or companies) without permanent residency may be limited to:

  • 50% ownership of new residential property,
  • purchasing new land or property provided construction starts within 12 months of purchase, OR
  • purchasing older property provided 50% of cost is dedicated to renovation

Some countries limit areas where foreigners can buy property. Such limitations generally apply to coastal areas, areas surrounding borders and airports or culturally allocated land. Such countries include:

  • Brazil (border, coastal and national security area restriction)
  • Mexico (border and coastal restriction)
  • Honduras (border and coastal restriction)
  • Belize (coastal and cayes restriction)
  • Nicaragua (indigenous area restriction)
  • Ecuador (border and coastal restriction)
  • Panama (waterfront, island and border restriction)
  • Romania (forest, reserve and coastal restriction)
  • Spain (border restriction)
  • Singapore (public housing restriction)

When it comes to the size and type of land acquired, many countries limit the purchasing of property by foreigners, this includes:

  • Canada (2 to 4 hectares in certain regions)
  • Poland (0.4 hectares in urban regions to 1 hectares in rural regions)
  • Fiji (only 8.2% of all land available for foreign purchase)

Then there are tax issues to be aware of. Some countries make it relatively easy for foreigners to purchase property, but levy exorbitant taxes on foreign-owned land. Sri Lanka, for instance, levies a 100% transfer tax on foreign property purchases, which essentially doubles the purchase price of property for foreigners. Other countries aren’t quite as high, but in a place like Belgium you could look at roughly 18% taxation on the purchase price of your property.

Other countries like the USA require foreign buyers to secure an Individual Taxpayer Identification Number and should you seek financing within US borders your credit score will be verified and you will be required to open a US bank account and credit card in addition to reporting your income tax to US officials. In Australia you will be required to pay a vacancy tax (introduced in 2017) should you not reside or utilise your purchased property for more than 6 months. New Zealand went a step further by banning all foreign land purchases for non-residents.

Then there are other restrictions you may not have thought of. In Croatia, for instance, you can only purchase property if Croatians are allowed to purchase property in your country of origin (or citizenship). And in Romania and Bulgaria you can purchase apartments and buildings, but the land itself can only be owned by Romanians or Bulgarians respectively.

Many of these issues can, however, be overcome should the purchaser and/or his/her company establish clear economic gains to the country and/or purchase property through a locally owned or established business.

When it comes to restrictions, the best countries for foreigners to purchase property are currently:


No restrictions to property purchasing for foreigners in France


No restriction to property purchasing for foreigners in Italy


Costa Rica has virtually no restrictions to foreign property ownership


Fiji is an easy place to invest in property and offers automatic residency for a minimum investment of around R1.7 million.

Where are South Africans buying property?

According to PEW research who conducted research comprising 900 000 South Africans over who have migrated between 1990 and 2017, the most popular countries where South Africans migrate to are:

  1. The United Kingdom (210 000+ migrants)
  2. Australia (190 000+ migrants)
  3. United States (100 000+ migrants)
  4. New Zealand (60 000+ migrants)
  5. Canada (50 000+ migrants)
  6. Angola (40 000+ migrants)
  7. Botswana (40 000+ migrants)
  8. Chile (20 000+ migrants)
  9. Zimbabwe (20 000+ migrants)
  10. Germany (20 000+ migrants)
  11. Netherlands (10 000+ migrants)

It is important to note that these statistics don’t indicate the prevalence of property purchasing by SA expats. Given the above-mentioned restrictions, it’s therefore possible that these South Africans are either leasing or may have been temporarily abroad at the time of compiling the research.

Nevertheless, the research does give a good overview of South African expat sentiment. For those who wish to relocate and want to find a South African community as their second home abroad, these countries may offer the best option.

A changing landscape

The UK and USA which have both been popular destinations for South Africans who wish to purchase property or resettle abroad are both rapidly changing landscapes and it is important to note some issue foreigners may experience in future.

In the UK, for instance, property buying has been relatively easy in the past as there are limited restrictions to foreign land ownership. But the UK is a country of limited space and faces a housing crisis in that younger britons wishing to own a home are finding it increasingly difficult to do so.

It is this issue which has prompted Theresa May to announce a new tax for foreign property buyers which will increase the stamp duty for all properties purchased by foreigners. The stamp duty currently ranges from 2 to 13% of the property price on all properties over £125 000 (or roughly R2.2 million at the time of publishing this article).

In South Africa, most first-time buyers will clock in below this purchase price, but keep the following averages in mind when considering buying property in the UK.

The following is an overview of UK property price averages at Q3 of 2018:

  • East Midlands: £186 414
  • East Anglia: £228 690
  • London: £486 544
  • North East: £125 085
  • North West: £162 596
  • South East: £323 435
  • South West: £254 434
  • West Midlands: £190 607
  • Yorkshire and the Humber: £160 263
  • Northern Ireland: £139 374
  • Scotland: £149 161
  • Outer Met: £364 309
  • Outer SE: £279 858
  • Wales: £154 881

Though it is rather foolish to translate sterling to rands offhand, for the sake of this article we can say that these rates translate to a minimum average of R2 216 334,75 (North East) and a maximum average of R8 621 237,41 (London) at current mean currency conversion, excluding any rates, fees or taxes.

Given that ALL these average property prices are above the threshold for stamp duty payment and that the UK will increase stamp duty for foreign buyers by a purported 1% and you will see where the problem comes in. The UK will also change their Capital Gains Tax (CGT) rules for foreign property owners.

The new CGT rules (applicable from April 2019) will no longer exclude residential property disposals or the disposal of shares in property holding companies. As of  April 2019, new CGT rules will apply to “property rich” companies (those whose value derives 75%+ from UK property) as well as non-residents (and partners) who had held at least 25% interest in the equity in 25%.

With Brexit also on the cards, many analysts are wondering what further changes are on the cards for both residents and non-residents in the UK.

Real estate costs worldwide

The cost of property varies greatly worldwide and you will find that these prices vary greatly within small radii, as is evident in the UK blurb above.

To give you an idea, we’ve listed the cheapest and most expensive areas to purchase property as listed by Telegraph and Money Inc. respectively.

Most affordable property in the world (based on price-to-income):

  • Spain
  • Greece
  • Finland
  • Portugal
  • Switzerland
  • Ireland
  • USA
  • Germany
  • Japan
  • South Korea

Most expensive property in the world (based on cost per square metre):

  • Monaco
  • London, UK
  • Hong Kong
  • New York City, USA
  • Tokyo, Japan
  • Moscow, Russia
  • Mumbai, India
  • Geneva, Switzerland
  • Vienna, Austria
  • Paris, France

You might see some discrepancy in the abovementioned stats, but this is where you must consider the radii we mentioned above. You may be able, for instance, to get a really affordable place just outside Geneva in Switzerland (based on the price-to-income), but if you consider the population density, area coverage and availability of property within metropolitan areas it makes sense that the cost of property increases exponentially in regions with high population and limited surface coverage.

Reasons to buy property abroad

There are various reasons why you may consider buying property abroad. Some South Africans like to prepare in advance by buying property in the chosen location which they would like to immigrate to before the fact. Others choose to purchase property for the investment value instead of renting.

For the former group, countries may be more lenient given your intentions and make a concession on normal regulations. If not, it may be a good idea to hold off on purchasing the property until you’ve already immigrated. This will not only give you more time to scope out preferred areas, but as a permanent resident you will no longer be bound by the regulations placed on foreign nationals.

For the latter, such investments can afford massive returns on investment. The National ran an article in February 2018 which highlighted how two ordinary men who had not foreseen making millions by retirement had done just that through investing in property.  Both individuals had purchased rental property in Dubai (freehold real estate) and have been living off the rental income ever since.

Dubai is one of the regions in the world which has a largely nomadic populace. This usually sees foreigners who are temporarily in the region (for a few years) rent property instead of buying. One of the individuals mentioned in the article stated that this is the biggest mistake foreigners make.

With a 25% deposit and mortgage, purchasing property will cost you about the same per month as your rental costs, with the big difference that you can either sell or accumulate a rental income from the property when you leave Dubai.

First things first: getting a lawyer

Most property brokers will tell you that the first thing to do is to contact a lawyer or solicitor in the region you are looking to buy.

Though South Africans tend to approach real estate agents first when purchasing property locally, it’s important to note that this may not be the right approach when purchasing property abroad. In the UK, for instance, you will be required to use a solicitor for property purchasing from the get-go. In countries like Mexico, real estate agents have been known to  offer property to foreigners which the government may view as illegal, and foreign bought property requires the setup of a real-estate trust if the property falls within the restricted zone.

There is no one-size-fits all solution for real estate purchases around the globe, which is why it’s bests to have a region in mind and then contact a legal advisor in the area. Some of the most noteworthy international legal real estate firms and/or associations in the world include:

Note, however, that it is incredibly important that you procure the services of a lawyer, solicitor or attorney who appeases you and fulfils your needs in whichever region you wish to purchase real estate. Do enquiries with friends, family and local lawyers in South Africa who can put you in touch with a professional who will see to your needs abroad.

Home Sweet Home!

Rand Rescue wishes you well on your journey to securing a new home or real estate investment abroad. And remember that we are your first stop when it comes to managing your cross-border finances. We can assist with account setup and applications, foreign exchange, financial emigration and much more. Feel free to contact us or leave your details below and we’ll get back to you!


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