OWNING PROPERTY IN SOUTH AFRICA AS A NON-RESIDENT: TAX TRAPS AND SMART STRATEGIES

South Africa’s property market continues to attract global investors, expats, and foreign nationals. Whether it’s a family home, a buy-to-let apartment, or a holiday escape, owning property here is relatively easy — but tax compliance isn’t.

At ACS Plus, we’ve seen too many non-resident property owners unknowingly fall into SARS traps that lead to unnecessary penalties, lost profits, and delayed transactions.

Here’s what every non-resident property owner in South Africa needs to know.

Who Counts as a Non-Resident?

If you’ve formally ceased tax residency with SARS — or never were a South African tax resident — you're considered non-resident. This includes:

• South African expats who have completed tax emigration

• Foreign investors with no permanent presence in SA

• Dual citizens living abroad

You may still earn income in South Africa, which means you are taxable on South African-sourced income — including rent and capital gains.

1. Rental Income = Taxable Income

Even if you're abroad, rental income from your South African property is taxable in South Africa.

• You must register as a non-resident taxpayer

• Submit annual income tax returns

• Pay tax on net rental income (after allowable expenses)

💡 Tip: You can deduct levies, rates, interest on bond repayments, insurance, and maintenance to reduce your taxable income.

Failure to declare this income can lead to penalties and interest — or even criminal charges if viewed as wilful evasion.

2. Capital Gains Tax (CGT) on Sale

Selling your property? Even as a non-resident, you’ll face Capital Gains Tax of up to 18% on profits from the sale.

PLUS: If the property sells for more than R2 million, the buyer must withhold and pay SARS a provisional tax of:

• 7.5% for individuals

• 10% for companies

• 15% for trusts

This “withholding tax” applies before the sale proceeds even reach you.

A poorly structured sale can delay the transaction or leave you overpaying tax — especially if you don’t claim allowable deductions or adjust for base costs.

3. Estate Duty on Death

Many non-resident investors are shocked to learn that South African property is subject to local estate duty upon death — even if their estate is wrapped in an offshore trust or will.

If not planned correctly, your heirs may face:

• Up to 20% estate duty

• Delays in transferring title

• Forced sales to settle liabilities

Advanced estate planning and trust structuring can help mitigate this risk — but it must be done before it’s too late.

4. Owning Through a Trust or Company

Non-residents often buy property via a South African trust or company — which can be beneficial for:

• Asset protection

• Succession planning

• Tax deferral

However, SARS scrutinizes these structures carefully. If not managed properly, they can create more problems than they solve — including deemed donations, transfer pricing issues, or even unintended residency triggers.

✅ How We Help Non-Resident Property Owners

At ACS Plus, we offer a complete cross-border service, including:

🔹 SARS registration and tax compliance

🔹 Tax-efficient structuring of property purchases and sales

🔹 Capital Gains and rental income tax calculations

🔹 Withholding tax guidance and clearance certificates

🔹 Estate and succession planning for non-residents

🔹 Annual financial statements and support for companies or trusts

Don’t Let Your South African Property Become a Liability

Owning property in South Africa can be a lucrative investment — but only if your tax affairs are in order.

Let us help you stay compliant, save money, and sleep easy knowing your assets are protected.

Contact us today for a confidential review of your property tax risks and opportunities.

Email queries@acsplus.co.za with the header: PROPERTY TRAP REVIEW.