Buying residential property in South Africa

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Knight Frank Cape Town

20 Dreyer Street
Claremont
Cape Town 7708
South Africa

T: +27 21 6719 120

South Africa has one of the best property registration systems in the world. The Deeds registry dates back to the first grant of land given in 1657 by the Dutch East India Company. The original document or 'Title Deed' was given to the owner and a copy kept in the Company’s books. This formed the first Deeds Register and these documents are carefully preserved in the Deeds registry in Cape Town.

All property that is suitable for ownership is recorded in the offices of the Surveyor General who is responsible for the survey and recording of all land in South Africa. Each erf or plot of land is carefully measured, and the corresponding erf number is the number used to describe the property purchased.

When a property or erf is sold, the transaction is then recorded by the Registrar of Deeds. The process is well regulated and the system ensures the security and indisputable right of the owner’s title. The purchaser can confidently rely on the title deed to describe precisely what he is buying, the size of the property and any registered servitudes.

Until 1986 there was only one kind of ownership of immovable property recognized in South African law, namely the traditional freehold ownership of an entire parcel of land or an erf. In 1986 the Sectional Titles Act was passed specifically to deal with the ownership of a flat or an apartment (a unit) within a building. This meant that a purchaser was able to obtain title and beneficial occupation of a unit within a building, could bond the unit and dispose of it in the same manner as if it was an individual erf.

There are no restrictions on foreign ownership of land in South Africa, although there has been some discussion on this subject. Foreigners may freely purchase and sell property and repatriate the original capital introduced from outside South Africa to make the initial purchase plus any profit made. Foreigners are also able to obtain mortgage financing from a South African financial institution to a maximum of 50% of the proposed purchase price.