When a non-resident sells South African property, getting the proceeds out of the country involves more than a standard bank transfer. Exchange control requirements must be met before a cent can leave South Africa and when these are only identified at transfer, delays are inevitable.
The good news is that these requirements are predictable. Identifying them early makes the process straightforward.
Step 1: Establish Who You Are Dealing With
Not all non-resident sellers are treated the same. How proceeds are handled depends on where the seller was born and whether they have formally ceased South African tax residency. Get this confirmed at instruction stage, not at transfer.
There are three categories:
- South African Residents living abroad: subject to annual limits on how much can be sent offshore
- Emigrants: those who have formally completed tax migration; their funds must be unencumbered before transfer offshore
- Bona Fide Non-Residents: foreign-born sellers; proceeds go into a Non-Resident Rand account pending SARB approval.
If you are unsure which category applies, this is exactly where we can help.
Step 2: Flag the SARS Requirements Early
Non-resident sellers have SARS obligations that arise on the sale of South African property. These include withholding tax considerations and, where the seller has no South African tax number, a registration requirement before any proceeds can be remitted.
We are not tax advisors and recommend your client engage with a tax practitioner early in the process.
Our preferred tax consulting partner, MyTAX, is readily available to assist our clients with obtaining Section 35A tax directives, calculating Capital Gains Tax, and applying for SARS tax numbers. SARS tax numbers can typically be issued within 24–48 hours of receiving the required supporting documentation. These requirements take time and leaving them to the transfer stage will delay the deal. Flag them at instruction and direct your client to the right professional immediately.
Step 3: Open the Right Account for Proceeds
Once transfer is effected, sale proceeds must land in the correct account type. Getting this wrong is difficult to reverse. Currency Partners opens and manages the appropriate account –  Emigrant Rand or Non-Resident Rand – on behalf of the seller, so that funds paid by the conveyancer are held correctly while SARB approval is obtained.
Step 4: Remit Proceeds Offshore
Once all approvals are in place, we convert and transfer the funds to the seller’s overseas account. Every payment is verified through a secure portal and confirmed telephonically before transfer.
The Bottom Line
The compliance requirements in a non-resident seller transaction are the same every time. Map them out at instruction stage, bring in the right specialists early, and the transfer closes on time.
Currency Partners supports conveyancing practices through every step of this process at no cost to the referring practitioner. Get in touch to discuss a specific transaction or to set up a referral arrangement.
