For years, many South African taxpayers believed that overseas property sat quietly outside the scope of the South African Revenue Service (SARS). A holiday home in Portugal. An investment apartment in France, or a rental property in Spain, earning euros while life carried on elsewhere.
That era of quiet offshore ownership is coming to an end.
Thanks to a major global tax transparency development, SARS will soon automatically receive information about foreign immovable property owned by South African tax residents. If you still count as a South African tax resident, your overseas property portfolio is about to become very visible.
The question is not whether SARS will know. The question is whether you are prepared.
Top three takeaways on foreign property tax reporting
- SARS will automatically receive information about your foreign property. Under a new OECD-backed framework, SARS will soon have direct access to foreign property reporting data from more than 20 countries. This includes ownership details, transactions and income linked to overseas immovable property. Offshore property is no longer invisible.
- If you are a South African tax resident, your foreign property is fully taxable. Being tax resident means foreign rental income, foreign property tax, and capital gains tax on foreign property all fall within South Africa’s tax net. Paying tax overseas does not remove your South African reporting or tax obligations.
- Getting your tax residency wrong could become very expensive. Once automatic reporting begins, undeclared assets may trigger audits, penalties and interest. Properly terminating South African tax residency before the new reporting rules take effect can protect you from foreign asset reporting requirements and future SARS scrutiny.
Foreign assets reporting: the global shift that changes everything
South Africa is one of 25 jurisdictions that have formally committed to a new OECD reporting framework focused on non-financial assets, especially offshore property. This framework is called the Multilateral Competent Authority Agreement on Automatic Exchange of Readily Available Information on Immovable Property (IPI MCAA). It plugs one of the last remaining gaps in global tax transparency.
Until now, international cooperation focused mainly on bank accounts and investments through the Common Reporting Standard (CRS). Under OECD CRS reporting, tax authorities automatically exchanged information on financial accounts, investment portfolios and even crypto assets.
What was missing was foreign property. That gap is now closing.
Participating countries include France, Portugal, Spain, the United Kingdom, Ireland, Italy, Germany, Belgium, Sweden and many other popular destinations for South Africans buying property abroad. Once the new rules come into play, SARS will receive automatic data on foreign property reporting, ownership details and in time, transactions and income linked to those properties.
When does this foreign financial assets reporting requirement start? South Africa plans to activate the new automatic exchange of information rules by 2029 or 2030, once local legislation is finalised. That may sound far away, but this is exactly how CRS reporting unfolded. Once it went live, SARS began matching offshore data against tax returns and asking uncomfortable questions.
When foreign financial assets reporting requirements expanded under CRS, many taxpayers found themselves explaining why assets were never disclosed. The same approach is expected under the new foreign asset reporting requirements for immovable property.
Foreign financial assets reporting: What SARS will be looking for
If you are still a South African tax resident, SARS will expect full disclosure and correct tax treatment of:
- Foreign property tax reporting
- Foreign rental income
- Foreign rental income tax
- Capital gains tax on foreign property
- Foreign assets reporting in your annual tax return
This applies whether the property is used privately, rented out long term or listed on Airbnb. Rental profits earned abroad fall under tax on rental income from foreign property, while disposals trigger capital gains tax on property abroad. Double tax agreements may offer some relief, but disclosure is still mandatory. Non-disclosure is where penalties begin.
Buying property overseas while living in South Africa
For South Africans still living at home, or those who have not formally ceased tax residency, when buying property overseas, the tax implications must be carefully considered. Many investors assume that paying tax in that foreign country is enough. It is not. As a South African tax resident, your worldwide income and capital gains remain taxable in South Africa. This includes:
- Foreign property tax
- Tax on rental income from foreign property
- Capital gains tax on foreign property sale
Failure to declare these correctly can result in understatement penalties, interest and potentially severe consequences under SARS driven compliance initiatives, according to South African tax news.
Selling property abroad does not mean SARS looks away
When you sell property overseas, tax is usually payable in the country where the property is located. Many South Africans assume that this ends their tax obligation. It does not.
If you are still a South African tax resident, SARS requires you to declare the sale and account for capital gains tax on foreign property, even if tax was already paid abroad. This includes full disclosure of selling property abroad and any capital gains tax on sale of overseas property in your South African tax return.
Foreign taxes paid may reduce your South African tax liability, but only if the relief is claimed correctly. Once automatic property reporting becomes active, SARS will be able to match foreign property sales to tax returns, making errors or non-disclosure far more likely to be detected.
The penalty risk is real when it comes to foreign asset reporting
Once SARS has third-party data confirming offshore ownership, claiming ignorance is no longer an option. Penalties for non-compliance can include:
- Administrative penalties
- Understatement penalties of up to 200%
- Interest on unpaid tax
- Questions around historic non-disclosure
Long story, short? the penalty for not declaring foreign property can be severe and expensive.
Why tax residency matters more than ever
The upcoming property reporting framework changes the risk profile for South Africans abroad. A properly executed tax emigration from South Africa is the only way to ensure that ensure that:
- Foreign assets reporting no longer applies to SARS
- Foreign rental income tax falls outside the SA tax net
- Capital gains tax overseas property is not triggered in South Africa
- SARS cannot retrospectively question offshore wealth
This is not about hiding assets. It is about aligning your tax status with your real life circumstances. If you have emigrated permanently, no longer intend returning and have established your financial life abroad, formalising your non-resident tax status is critical before automatic property reporting begins.
Read more: The dangers of not completing tax emigration after you leave South Africa.
FinGlobal advice: the bottom line for foreign property tax reporting
SARS is entering a new era of digital visibility. With the OECD reporting, CRS reporting standards and now the IPI MCAA, global tax authorities are sharing more data than ever before. Offshore property is no longer invisible.
Whether you are:
- An expat with investment property overseas
- A South African earning overseas rental income tax
- An investor buying overseas property
- Or planning on selling foreign assets in future
The time to review your tax residency, disclosure obligations and compliance strategy is now. Because when SARS already knows, that means the opportunity to fix things quietly has passed.
If you’re ready to simplify your cross-border finances and straighten out your tax situation, FinGlobal can help you manage tax compliance, formalise your tax emigration, confirm your non-resident status, withdraw your retirement annuity and transfer funds abroad with confidence.
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