In brief (TL;DR): Selling South African property as a UK resident triggers Capital Gains Tax and withholding tax rules. We manage the tax clearances and repatriation of your property proceeds, securing the AIT to release your funds to the UK.
Many expats settle in the UK, rent out their South African properties for a few years, and only decide to sell when they're ready to permanently establish their roots in Britain. If you're living in Berkshire but selling a family home in Camps Bay or a townhouse in Sandton, moving those property proceeds to the UK involves a complex web of South African tax rules.
As an expat, you may be classified as a non-resident for tax purposes in South Africa — a status that fundamentally changes how a property transaction is handled by conveyancing attorneys and SARS. If you haven't yet formalised that status, our complete guide to tax emigration explains the process and why it matters before you sell.
The Non-Resident Withholding Tax (Section 35A)
The biggest shock for expats selling property back home is the application of Section 35A of the Income Tax Act. If you're a non-resident and you sell a South African property for more than R2 million, the buyer's conveyancing attorney is legally obliged to withhold a percentage of the sale price.
This withholding tax is calculated at:
- 7.5% for natural persons (individuals)
- 10% for companies
- 15% for trusts
The withheld amount must be paid to SARS within 14 days. It acts as an advance payment toward your final Capital Gains Tax (CGT) liability — not an additional tax on top of it.
Unlocking the Withheld Funds
The withheld amount is not your final tax bill. Once your actual CGT liability is calculated during your annual tax return (or via a specific tax directive applied for before the transfer), you may be entitled to a refund if the withheld amount exceeds your actual tax debt.
Getting the balance of your property proceeds out of South Africa requires another critical step: the Approval for International Transfer (AIT). Our guide on AIT processing timelines explains what to expect and how to avoid delays that can hold up your proceeds.
Because you're moving funds out of the country as a non-resident (or using your Foreign Investment Allowance if you still retain tax residency), you must apply to SARS for an AIT. This requires submitting the final conveyancer's account, proof of the property sale, and a clean tax compliance history.
A word from Adele: "Expats are often deeply frustrated when conveyancers hold back their property proceeds, locking their money in South Africa. We work proactively with our clients to make sure their tax affairs are aligned. By managing the AIT application while the property is still in transfer, we secure the necessary clearances to release the funds the moment the conveyancer is cleared to pay out."
UK HMRC Implications
Don't forget that HMRC may also have a claim. As a UK resident, you're taxed on your worldwide income and gains. While the SA-UK Double Taxation Agreement (DTA) makes sure you won't be taxed twice on the same gain, you still have a legal obligation to report the South African property sale on your UK Self Assessment tax return.
Your next move
If you've accepted an offer on your South African property, don't wait until the transfer is registered to start your forex compliance. Contact WBForex to prepare your SARS AIT application and arrange a competitive transfer rate for your proceeds.
