Buying Property In South Africa While Living Abroad: How Exchange Control Shapes Your Mortgage

If you are living outside South Africa and buying a home here, your bond (mortgage / home loan) will almost always include exchange control conditions. The bank is not being difficult; it's the Reserve Bank's way of ensuring that a meaningful portion of the purchase price arrives as "hard currency" from abroad before credit is advanced locally.

The Main Rule

For most buyers who are not permanent residents, South African banks will only lend up to about 50% of the property's price. The rest must come from outside South Africa and must be clearly proven. Your mortgage instructions to the lawyers will usually include wording such as:

"This bond is subject to Exchange Control conditions. Documentary evidence that the balance of the purchase price was introduced from abroad and invested in South Africa (see Section I.1(E) of the Exchange Control Rulings) is required. Please provide the Offer to Purchase and the documentary proof."

The purpose is simple: to keep South Africa's foreign exchange records clean, make sure imported funds are traceable, and allow the Reserve Bank to confirm the purchase can be sold and repatriated later in line with the rules.

Who is Caught by the Rule?

• Non-residents (not ordinarily resident in South Africa) buying SA property.
• Temporary residents (for example, on work or study visas) who don't yet qualify as "resident for exchange control purposes".

In both cases, a local bond can be granted only if the non-resident portion of the price is properly introduced and proven.

What will the Bank and Conveyancers look for?

Your attorney's instruction and the mortgage loan agreement will typically flag two things:

1. That the loan is granted in terms of the SA Reserve Bank Exchange Control Regulations, and
2. That R [specified amount] is being introduced from a non-resident source, with proof required.

This is your cue to assemble the paper trail early. The "documentary evidence" needs to show the funds landed in South Africa from abroad and are earmarked for this purchase.

What Counts as Acceptable Proof?

Banks follow tightly defined standards. In our experience, one (or more) of the following will satisfy the requirement:

• SWIFT confirmation from the authorised foreign-exchange dealer/bank that remitted the funds.
• A local bank statement for your non-resident rand account (sometimes called an NR account) showing the rand amount debited for the transfer to the conveyancer, plus the payment proof issued.
• A bank guarantee where the funds come from the sale proceeds of another South African property owned by you as a non-resident.

Funds can be split across sources (for example, part from your offshore account and part from the sale of your SA property). That's fine, just expect to supply proof for each leg so the combined amount equals the required "introduced from abroad" value. Where, after investigation, it turns out a particular amount was not required to be from a non-resident source, your attorneys will record that position and the bank will adjust the condition accordingly.

How does the 50% cap work in real life?

Think of the purchase price as two buckets:

• Bucket A (hard funds): money you remit from outside South Africa or proceeds of an earlier non-resident investment that qualify under the rules.
• Bucket B (local credit): the bank's home loan, typically up to 50% of the price.

If Bucket A isn't fully in place, or the proof isn't satisfactory, the bank will not allow Bucket B to flow. This is why deals stall late in the day: everyone assumed "proof will be simple", and only then discovers that a screenshot or internal transfer won't do.

Practical Timing Tips

• Open the right local account early. If you don't already have a non-resident rand account with a South African bank, arrange it before you sign – your forex dealer will need it to receive inward remittances.
• Brief your offshore bank. Ask them to reference your name and the property/attorney file number on the SWIFT message; it makes matching far quicker.
• Route funds to the conveyancer's trust account, not your friend's. Interposed personal accounts can break the audit trail and trigger additional queries.
• Tell your attorneys about every source. If you're using two remittances and a property sale guarantee, flag all three upfront so they can compile the bank's pack once, cleanly.
• Keep originals. PDF statements and SWIFT MT103s are the gold standard; screenshots or third-party apps usually are not accepted.

FAQs we hear most at Fairbridges

Can I raise more than 50% locally?

Occasionally, where additional qualifying funding is introduced (e.g., larger offshore remittances or ring-fenced proceeds), banks may structure above 50%. Treat anything beyond the general rule as case-by-case and assume the strict standard until confirmed in writing.

What if I'm paid in rands from a South African source?

If those rands are not traceable to a qualifying non-resident source, they generally won't count towards the "introduced from abroad" portion. Your attorneys will help you test the source and record any exceptions the bank accepts.

Can the proof be provided after bond registration?

No, the bank's exchange-control condition is usually suspensive. Proof must be submitted before the bond can be registered.

Buying from abroad is completely doable and tens of non-resident transfers are registered every week, but the exchange control paperwork is unavoidably exacting. Get the channels, references and proofs right from the outset and you'll turn a potential bottleneck into a smooth hand-off between your forex dealer, bank and conveyancers.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.