For years, foreign property has existed in something of a grey area within global tax transparency systems. Bank accounts, investment portfolios, and crypto holdings have long fallen under international exchange frameworks — but bricks and mortar largely did not.
That is set to change. From as early as 2029, South Africa will begin participating in a new international reporting framework that brings foreign immovable property into the automatic exchange net. If you are a South African tax resident who owns investment property overseas, this development is likely to affect your compliance position.
Before panic sets in, here is what really matters.
The top three takeaways on foreign asset reporting requirements for expats:
- SARS will soon see your foreign property — automatically. The new framework expands global foreign property reporting beyond financial accounts. Once activated, SARS will receive data on ownership, rental income, and property disposals in participating jurisdictions. This marks a major shift in foreign asset reporting requirements.
- Rental income and capital gains have always been taxable. Even before these changes, foreign rental income, capital gains tax on foreign property sale, and tax on rental income from foreign property were reportable if you remained a South African tax resident. The difference now is visibility — enforcement becomes significantly easier.
- 2029 is not far away — and there is a compliance window. Although exchanges are expected from 2029, taxpayers still have time to review historical foreign financial assets reporting and correct any gaps before automated data-sharing begins.
Foreign property reporting: what is actually changing?
The new system stems from an initiative developed by the Organisation for Economic Co-operation and Development. It is known as the Multilateral Competent Authority Agreement on Automatic Exchange of Information on Immovable Property (IPI MCAA).
Until now, the global common reporting standard focused on financial accounts under CRS reporting standards. Through OECD CRS reporting, participating jurisdictions already exchange data on offshore bank accounts under the broader automatic exchange of information system.
However, property was excluded from traditional Common Reporting Standard (CRS) mechanisms. The IPI MCAA changes that. It expands foreign financial assets reporting requirements to include immovable property such as apartments, houses, and commercial real estate.
Foreign asset reporting: what information will be shared?
Once South Africa activates bilateral exchange relationships with participating countries, SARS is expected to receive:
- Historical ownership data
- Acquisition dates and purchase prices
- Property characteristics
- Disposal information when selling property abroad
- Annual rental income figures
- Beneficial ownership details (even where property is held via trusts or companies)
In other words, foreign assets reporting will move from reactive to automatic.
Many popular destinations for buying overseas property, including Portugal, Spain, the United Kingdom, and France, are already part of Common Reporting Standard countries under the broader OECD Common Reporting Standard framework. These Common Reporting Standard CRS countries are likely to be early adopters of property exchange agreements.
Foreign property tax reporting: why this matters for South African tax residents
South Africa applies a residency-based tax system. If you are a South African tax resident, your worldwide income and capital gains are taxable locally. That includes:
- Foreign rental income tax
- Overseas rental income tax
- Tax on overseas property rental income
- Capital gains tax on overseas property
- Capital gains from foreign property
Many taxpayers misunderstand the tax implications of buying property overseas, assuming that paying foreign property tax abroad means no South African obligation exists. In reality, even if foreign taxes are paid, disclosure under South African foreign property tax reporting is still mandatory. Relief may be available through double taxation agreements, but reporting is not optional.
What you need to know about Capital Gains Tax on property abroad
When you are selling property abroad, South Africa requires you to declare:
- Base cost (purchase price plus qualifying expenses)
- Disposal proceeds
- Calculated gain
- Foreign taxes paid
The gain is then subject to South African capital gains tax on foreign property, with a potential foreign tax credit to prevent double taxation. Failure to declare capital gains tax on the sale of overseas property could result in substantial penalties once automated reporting begins.
Foreign property tax reporting – rental income is a high-risk area
Rental income is one of the biggest risk areas in foreign financial assets reporting. If you earn rental income from foreign property, it must be declared annually in your South African return. This includes:
- Foreign property rental income tax
- Tax on rental income abroad
- Tax on rental income from foreign property
With enhanced data under the new framework, the penalty for not declaring foreign property income could escalate rapidly — especially if SARS initiates the enquiry.
CRS reporting vs property reporting
Taxpayers are already familiar with CRS reporting under the OECD Common Reporting Standard system. Under traditional OECD reporting, financial institutions report financial account information to tax authorities, who then exchange it internationally.
The new property agreement operates alongside, but separately from, existing Common Reporting Standard CRS country frameworks. It broadens transparency beyond financial accounts to include tangible assets. In short, if your offshore bank account is visible under OECD CRS reporting, your property may soon be too.
The strategic question: Are you still a South African tax resident?
For South Africans living abroad, the bigger issue may not be the property itself, but tax residency status. If you have permanently emigrated but never formally ceased tax residency, you may still fall within South Africa’s tax net. That means exposure to.
- Foreign rental income
- Capital gains tax on property abroad
- Ongoing foreign asset reporting requirements
Simply living overseas does not automatically remove your South African tax obligations.
Read more: Why South African expats must stay sharp on SARS tax residency rules.
Advice for South Africans with foreign investment properties
This development is a big deal in terms of South African tax news. The expansion of foreign property reporting under the multilateral competent authority agreement signals a decisive shift toward full transparency in global property ownership.
If you own investment property overseas, are considering buying property abroad, or plan on selling property abroad, now is the time to review your compliance position. The rules have not fundamentally changed — but enforcement is about to become far more powerful. And in a world of expanding automatic exchange of information, visibility changes everything.
FinGlobal: cross-border compliance specialists for South Africans
Whether you need help regularising past disclosures, understanding the tax implications of buying property overseas, or reviewing your South African tax residency position, our team can guide you through the process with clarity and confidence.
The reporting net is expanding. The compliance window is open — but it will not stay open forever. Speak to FinGlobal today