South African Real Estate market

The South African Real Estate market peaked in 2007, but when the South African National Credit Act went into effect on June 1, 2007, financing became harder to get and the market slowed. Since then sales volumes have dropped by nearly 40 percent in some parts of South Africa.
Most foreign buyers who come to South Africa are drawn to the Cape Town area as well as the Garden Route region, a lush, mountainous terrain stretching along the coast from the Western Cape into the Eastern Cape, is especially popular. Foreigners who buy in Johannesburg and Pretoria, which are both in the Gauteng province, commonly come from elsewhere in Africa, often Kenya, Nigeria and Tanzania. These same buyers are drawn by the well-regarded schools.
Foreigners are not restricted from owning property in South Africa, Ms. Thorpe said, but in general the maximum amount of financing they can get is 50 percent. That said, most foreigners pay in cash. Buyers pay a transfer tax, the exact amount depending on the purchase price. This house is listed at 6.5 million rand; its transfer tax would be 465,000 rand ($62,700), plus 29,000 rand ($3,900) for legal fees, 4,060 ($548) in value-added tax and another 1,000 rand ($135) in deed-transfer costs. When foreigners sell their South African properties, the government withholds about 20 percent of the sales price until all capital gains taxes are paid. Capital gains tax levels are pegged to income-tax bracket.