# Buying property in SA



## jjoddiiee (Aug 31, 2013)

My husband and I (both living in the UK) are considering buying a home for his parents in SA (they are South African and living in SA). 
We would be looking to spend approx £20k (R340000). 
Does anyone know if we would be able to send them that amount? When I google it there are lots of companies offering to make the transfer, but I'm wanting to know if there's a limit on the amount you can send over.
Also, if anyone's got any experience of this do you know if it would be better buying the property in their name or ours?
Thanks
Jodie


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## Johanna (Apr 13, 2009)

jjoddiiee said:


> My husband and I (both living in the UK) are considering buying a home for his parents in SA (they are South African and living in SA).
> We would be looking to spend approx £20k (R340000).
> Does anyone know if we would be able to send them that amount? When I google it there are lots of companies offering to make the transfer, but I'm wanting to know if there's a limit on the amount you can send over.
> Also, if anyone's got any experience of this do you know if it would be better buying the property in their name or ours?
> ...


I think you should get legal advice on this matter.

Transfer fees are quite high, it depends on the price paid for the property, etc. Be careful in choosing any company from the internet.

Where abouts do they want to live?


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## jjoddiiee (Aug 31, 2013)

Thanks for your reply, we will get proper advice on it if we do go ahead with this, I was just after some basic pointers to see if it's going to be possible.

My mother-in-law works at Northgate (in Gauteng) so anywhere within reasonable driving distance will be fine. I've looked online and there is a good selection of affordable properties so I'm sure we can find something that they'll like and we have friends in SA who can help with liaising with estate agents etc.


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## shumifan49 (Sep 18, 2013)

Just some comments:
1. R340k is not a lot to buy a property, so selection will have to be done VERY carefully to ensure it is in a 'safe' area. This will require local knowledge, so look at property24.co.za and ask your SA friends about the area etc.
2. As far as I know transferring money to SA is not a problem. The UK has no limits. You can start by seeing your local banks and see which offers you the best rate. They will indicate the transfer rate, local(UK) fees and SA fees. The last time I checked a rate of R17.50 to a pound was being offered. With larger amounts a better rate might be negotiable.
3. I don't know whether there are other legal implications, but I would suggest you buy it in your own name as this will avoid inheritance tax, and other inheritance issues, later on, if this is the only implication. This might/will have tax implications for your in-laws as they are receiving a benefit, which presumably is taxable.

Taking money out of SA is a totally different proposition, so keep all documentation of the transfer, in case you want to take the money out sometime in the future. I believe you can take out what you bring in, with reasonable profits, from talking to international banking at ABSA in SA.


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## MissGlobal (Aug 4, 2012)

You can send whatever amount you want as long as it is legally declared. You just need advice about the best way to do so. I suggest setting up a bank account with a bank that banks here - like HSBC. That could smooth things over too.

And I agree with shumi....340 k rand is very little for a house. Not impossible... but I'm assuming you want them in a safe area - so factor that into your search. As for how to buy it - SARS is going to have a field day with taxing them if you send them that much money 

And a final note - real estate agents work for the seller here - so be very wary!


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## jjoddiiee (Aug 31, 2013)

Thanks for your replies, that's very helpful.

Good to know that we CAN send the money over. Very interesting that they could get taxed on receiving a gift if we were to send the money to them to buy the house in their name, and that there could be inheritance tax consequences. I'm an accountant in the UK and that wouldn't be the case in the reverse situation, but I know nothing about SA tax so that's very good to know.

I know that R340000 isn't going to buy them anything fancy, but the place they're renting now is a basic 1 bed unit in a retirement village (which they hate living in) so really so long as it's a roof over their head and it's secure they'll be very happy. And obviously they'll get to view properties and decide which one they'd like, we'll not be doing the whole thing remotely from the UK and just sending them off to whatever looked best online. We've all agreed that Windsor is a no-go area but there are several other options and hopefully being a cash buyer with a lot of flexibility as to when the transaction actually occurs (they're not under any pressure to vacate the rental property) it will put us in a strong position to negotiate a good price. 

Jodie


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## shumifan49 (Sep 18, 2013)

> I'm an accountant in the UK and that wouldn't be the case in the reverse situation, but I know nothing about SA tax so that's very good to know.


I am sorry but you are wrong; In the UK the maximum tax-free gift is £3000 per annum after which it becomes taxable. If you bought a property in your parents name in the UK, there will be inheritance tax implications as the only time there is no inheritance tax is between spouses. When children inherit they will pay inheritance tax.

That is why it would be best to buy the property in your name. You can than charge them a token amount of 'rent' to avoid them having to declare it as a benefit. The exact amount that would be accepted as rent by inland revenue will need to advised by a SA tax person. The rent can then be gifted back to them, provided it is within the gift limits, not to become taxable. This would also avoid arguments with siblings about inheritance distribution.


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## jjoddiiee (Aug 31, 2013)

shumifan49 said:


> I am sorry but you are wrong; In the UK the maximum tax-free gift is £3000 per annum after which it becomes taxable.


Not that it's really relevant here, but in the UK gifts exceeding the annual limits only become taxable if the person making the gifts dies within 7 years AND the value of their estate exceeds the inheritance tax allowance (currently £325k). As we're both in our 30s and our house is only worth about a third of that we wouldn't be risking paying tax at all if all parties were in the UK. I can't even see that capital gains tax would be an issue.



Thanks for your comments though, I think I will need to contact a south african accountant to establish exactly what will be taxed and at what rates.

Cheers
Jodie


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