Owning property back home while living abroad is more common than you think. Many South Africans keep their family home or an investment property long after relocating, whether for sentimental reasons or to earn an extra income. The part that often feels confusing is the tax. Even if you complete tax emigration and become a non-resident for tax purposes, SARS still expects you to declare any rental income, interest income or capital gains from South African sources.
The good news is that staying compliant does not need to be stressful. Once you understand what applies to you, managing your tax as a non-resident landlord becomes surprisingly straightforward.
Top three takeaways on South African property ownership for expats:
- Non-residents must pay tax in South Africa on income from a South African source, including rent, interest and property sales.
- Your tax residency status determines whether you pay tax only on SA income or on your worldwide earnings.
- With the right support, especially from a cross-border tax expert like FinGlobal, it is easy to stay compliant and protect your investment.
Read more: Buying and selling South African property investments: tax implications for non-residents explained.
Understanding your South African tax obligations as a non-resident
South Africa uses a residence-based tax system. That means:
- If you are a tax resident → SARS taxes you on your worldwide income.
- If you are not a tax resident → SARS only taxes you on income earned from South African sources.
So if you still own property back home, here’s how each income stream is taxed.
Read more: Who pays what? The key difference in income tax obligations between residents and non-residents.
Do non-residents pay tax on rental income in South Africa?
1. Rental income: yes, it’s taxable in South Africa
If your property is rented out, your rental income is always taxable in South Africa – regardless of where you live or where the money is paid. You can deduct legitimate expenses such as:
- Rates and taxes
- Repairs and maintenance
- Bond interest
- Rental agent fees
- Insurance
Only the profit is taxed. A common misconception is that rental agents handle everything, including tax. They don’t. They collect rent, but you must declare that rental income in your annual SARS tax return.
What taxes apply when selling property in South Africa as a non-resident?
2. Capital Gains Tax when you sell your SA property
Selling property triggers capital gains tax (CGT). As a non-resident, you are only taxed on South African immovable property, not offshore assets.
When you ceased South African tax residency, SARS applied the “deemed disposal” rule to your worldwide assets except your South African property. This means SARS always intended to tax this property when you sold it or upon your passing. When you do sell, here’s how it works.
Read more: Selling your property in South Africa – the guide to expat Capital Gains Tax implications.
Withholding tax for non-resident sellers
If you sell property for more than R2 million, SARS requires the purchaser (usually via the conveyancing attorney) to withhold a percentage of the sale price and pay it directly to SARS.
The withholding rates are:
- 7.5% — If the seller is an individual
- 10% — If the seller is a company
- 15% — If the seller is a trust
A key point: This is not the final tax. It is simply a prepayment towards your eventual CGT bill. You will still submit a tax return to determine the actual tax payable. If the withheld amount is too high, you can claim a refund.
If the selling price is R2 million or less, no withholding tax applies, but you still declare the gain in your tax return.
Applying for a lower or zero withholding rate
Many expats do not realise they can ask SARS to reduce the withholding tax upfront. If your taxable income is low, your gain is small, or you’re selling at a loss, you may qualify for a lower rate – or even a 0% withholding rate.
To request this, you (or your conveyancer) submit:
- Form NR03
- A tax calculation
- Supporting documents
- The offer to purchase
This is submitted directly to SARS before transfer. If approved, SARS issues a directive instructing the conveyancer to withhold less. This helps you avoid having large amounts tied up unnecessarily while waiting for assessment.
Practical tips for managing your SA Property from abroad
- Appoint a local tax representative: Having someone on the ground who can deal with SARS on your behalf makes all the difference. They can submit returns, respond to SARS queries and keep your tax profile active and compliant. FinGlobal does this for expats every day.
- Keep a record of:
– Rental statements
– Maintenance invoices
– Agent fees
– Bank statements
– Interest certificates: This makes your tax return simpler and protects you if SARS asks for supporting documents. - Choose a reputable rental agent: If someone else is managing your property, make sure they:
– Are licensed
– Are insured
– Understand non-resident requirements
– Provide monthly statementsA good rental agent keeps your property well-maintained and ensures your financial records are accurate.
Selling vs renting: what should non-residents do?
You don’t need to complete tax emigration or restructure your finances just because you still own property in South Africa. You can keep it, rent it, or sell it at any time.
Just remember:
- Renting = ongoing rental income tax obligations
- Selling = potential capital gains tax plus possible withholding tax
Neither option needs to be stressful when you have the right guidance.
How FinGlobal helps South Africans abroad
Managing South African tax compliance from overseas can feel overwhelming as an expat, but it doesn’t have to be. FinGlobal has helped thousands of expats in more than 105 countries take care of everything from tax emigration to SARS compliance and foreign exchange and cross-border financial planning.
With FinGlobal, your South African tax obligations stay simple, compliant and stress-free – no matter where in the world you are.
Ready to find out how we can streamline your cross-border tax affairs? Leave your contact details in the form below and we’ll be in touch to get the ball rolling.