Can Foreigners Buy Off-Plan in Cape Town? Rules and Tax

Yes, foreigners and non-residents can buy off-plan in Cape Town. The Reserve Bank's exchange control rules let non-residents invest in South African property freely, provided the deal is at arm's length and a market-related price and the money arrives in an approved way. What changes for you is practical: how you pay, how much a local bond can cover, how rent is taxed and what the buyer of your unit must withhold when you sell.

This guide covers each step for a non-resident buying a new apartment in Cape Town, using the Reserve Bank's Currency and Exchanges Manual (version dated 8 October 2026) and SARS guidance. It is general information as at 6 November 2026, not tax or legal advice: have a conveyancer and a tax adviser check your own position before you sign. For the buying process itself see our step-by-step off-plan guide.

Are there any restrictions on foreigners owning property in South Africa?

Not on ownership as such. The Reserve Bank's manual for authorised dealers says non-residents may freely invest in South Africa, provided suitable documentary evidence shows the transaction was concluded at arm's length and at a fair, market-related price, and was financed in an approved manner (SARB Currency and Exchanges Manual, section G(C)). A conveyancing attorney quoted by STBB makes the same point: there is no legal limit that outright prohibits foreign nationals or non-residents from owning immovable property (STBB).

"Non-resident" has a specific meaning for exchange control: a person or entity whose normal place of residence, domicile or registration is outside the Common Monetary Area, which is South Africa, Lesotho, Namibia and eSwatini. Exchange-control residence is a separate question from tax residence, which SARS decides on its own tests, so a person can be a non-resident for one purpose and not the other. Tell your bank and conveyancer where you live and pay tax so they treat you correctly.

How do you pay for an off-plan apartment from abroad?

Through an authorised dealer, which is a bank. The manual says all foreign exchange transactions must go through an authorised dealer, and lists the banks that qualify, including Absa, Nedbank, Standard Bank, FirstRand, Investec and Capitec. For a non-resident buyer the approved funding is the introduction of foreign currency, rand from a non-resident rand account in your name, or local financial assistance within the borrowing limits below (section G(C)(i)).

In practice this means your deposit and later payments should arrive from your offshore account as foreign currency, which the bank converts to rand and pays to the conveyancer's trust account. Banks must also verify who you are under the Financial Intelligence Centre Act, so expect to supply a passport, proof of address and proof of where the money comes from. Because the price is in rand, you carry exchange-rate risk between signing and your final payment: ask your bank about forward cover for the larger instalments.

Can a non-resident get a bond in South Africa?

Yes, but only up to a limit. For a non-resident buying residential or commercial property, the manual applies a 1:1 ratio: for every R1 you introduce from abroad, you may borrow R1 locally. The facility must be secured by an unencumbered rand deposit or rand-based asset of equal or higher value, it may not take your borrowing above 100% of the rand value of the funds you brought in, and it may not be increased later because the property has been revalued (section I.1(E)).

In plain terms, a non-resident bond covers at most about half the price. On a R4 million apartment, bringing in R2 million allows up to R2 million of local borrowing, and your own funds must cover the rest plus the costs. The manual allows an exception for non-residents who live and work in South Africa, who may borrow to buy a home subject to the lender's normal criteria. Banks also apply their own affordability and income rules on top. Companies and trusts that are 75% or more owned or controlled by non-residents count as "affected persons" and are treated in the same way for local borrowing.

Most of the off-plan bond mechanics are the same as for residents: the bond registers at transfer and your rate is set then. Read our guide to getting a bond for an off-plan apartment, then ask the bank in writing how it applies the 1:1 rule to your case.

Do foreign buyers pay extra transfer duty or VAT?

We found no non-resident rate: SARS publishes a single transfer duty table for every purchaser. As for residents, a sale is subject to either VAT or transfer duty, not both. A unit from a VAT-registered developer normally carries VAT inside the price and no transfer duty, while a resale carries transfer duty. Conveyancing and Deeds Office fees apply either way. Our cost guide for new apartments works through the numbers at four price points.

How is rental income from a Cape Town apartment taxed if you live abroad?

It is taxed in South Africa. SARS's guide to the residence basis of taxation says a non-resident is taxed only on income from a South African source, and that rental income arising in South Africa and received by a non-resident is subject to normal tax (SARS guide LAPD-IT-G02). You will need to declare it to SARS, and you should also check what your home country does with the same income and whether a double-tax agreement applies.

Sending rent abroad has its own steps. The manual lets an authorised dealer transfer rental income if you give a copy of the rental agreement, confirm the amount is reasonable for the property, and provide a SARS compliance document: a Manual Letter of Compliance for international transfers if you are not on SARS's database, or an Approval International Transfer (AIT) tax compliance PIN if you are (section B.3(B)(v), as amended by Exchange Control Circular 15/2025). Banks have been applying these checks more strictly since the October 2025 change, so ask yours early what it needs.

What tax applies when a non-resident sells?

Two things happen at once: capital gains tax on the gain, and a withholding taken from the price as an advance payment toward it. SARS says a non-resident is liable for capital gains tax on immovable property in South Africa, and that the amount withheld by the buyer serves as an advance payment toward the seller's final liability (SARS: Capital Gains Tax).

Under section 35A of the Income Tax Act, where the property is sold for more than R2 million, the purchaser must withhold from the price and pay SARS: 7.5% if the seller is a natural person, 10% if a company and 15% if a trust (SARS: Non-resident sellers of immovable property). It applies to the gross price, not the gain. On a R4 million sale that is R300,000 for an individual, R400,000 for a company and R600,000 for a trust.

You can ask SARS for a directive that sets a lower or zero rate, for example if the sale makes a loss or your taxable income is low. You apply on form NR03 with the offer to purchase, a tax calculation and supporting documents, and SARS generally processes it within 21 business days, so apply well before transfer. The buyer pays the withheld amount to SARS within 14 days if the buyer is a South African resident and within 28 days if not (SARS guide IT-PP-02-G01). Expect your conveyancer to hold the amount in trust until SARS replies.

After the sale, the manual treats the local sale proceeds of non-resident-owned assets as freely transferable (section G(C)(ii)). Your bank may still want to see the sale documents, the SARS outcome and your records of the original inward funds.

Does estate duty apply to a foreign owner?

It can. SARS says estate duty is levied on the South African property of non-residents as well as on the worldwide property of people ordinarily resident in South Africa. SARS's description of the calculation allows an abatement of R3.5 million, with duty at 20% on the first R30 million of the dutiable amount and 25% above it; SARS reported no change to these figures for the 2026/27 tax year. South Africa has estate duty agreements with the US, the UK, Zimbabwe, Botswana, Lesotho and eSwatini to prevent double taxation (SARS: Estate Duty). How these rules apply to a non-resident's estate depends on your domicile, your will and any agreement with your home country, so take cross-border advice before you buy, especially if you will hold the unit through a company or trust.

A checklist before you sign

• Confirm in writing whether the price includes VAT and whether the developer is a VAT vendor.

• Ask your bank for the process and documents for sending foreign currency to the conveyancer, and for forward cover on later instalments.

• If you need a bond, ask how the lender applies the 1:1 rule and what your own funds must cover.

• Keep every bank confirmation of funds sent in.

• Plan the exit: the 7.5%, 10% or 15% withholding, form NR03 and capital gains tax.

• Check the developer and the build before paying a deposit: see how to check a developer and a new development.