Accommodation in Cape Town

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Flats in Cape Town with Lion's Head in the background
Options for accommodation in Cape Town are plentiful and expats will need to decide on their priorities before choosing the area and type of housing that best suits their needs.

The city centre is relatively small and there are a number of neighbourhoods nestled in the midst of Table Mountain, Lions Head and Signal Hill in the City Bowl. Residential communities flank the mountain on either side, stretching up along the coast and down along the mountain into surrounding suburbs and family-friendly developments. Further away, to the southeast of the city, are townships and the Cape Flats, remnants of apartheid-era segregation.

House prices in Cape Town are among the highest in the country, with the most expensive per square metre rates situated closer to the city centre and seaside neighbourhoods.

It should, however, be easy for expats wanting to rent in Cape Town to find furnished, semi-furnished and unfurnished housing. It should be noted though, that utilities are rarely included in rental prices which continue to rise on the back of increased demand and limited supply. On the upside, domestic help is extremely affordable in South Africa, and many expats spoil themselves with this small luxury.

Finding accommodation in Cape Town

Once an expat has settled on the size and type of property they want, whether they're willing to tolerate morning and afternoon traffic and whether they would prefer to be in a leafy suburb or a colourful city district, they can begin house hunting.

An abundance of real estate agents in Cape Town provide free services for both renters and buyers. In South Africa, property owners bear the burden of paying agents to find tenants or owners for their houses and flats. Agents often aren't as proactive as they could be, however, and it may be necessary for the buyer to carry out a large amount themselves. Still, real estate agencies are great resources for finding out what kind of accommodation is available on the market.

Otherwise, expats can check weekly listings in major local newspapers as well as property websites and online classifieds.

Buying property in Cape Town

Despite the Rand’s weakness and low consumer confidence, the South African property market is gaining momentum and sellers have the advantage when it comes to Cape Town real estate. In fact, the majority of millionaires in Cape Town have made their fortune through property. Resale returns have, however, diminished since the height of the property boom and foreign investors are increasingly choosing to rent out their properties and settle for a stable source of income. 

Conversely, the weak Rand means that expats get high-end properties in Cape Town at great value for money with the amount of investors buying to rent increasing despite economic conditions in the country.
For more cash conscious expats, even with rising prices, many people find that renting a property in Cape Town is a cheaper option in the short term.

Non-resident property laws

There are no restrictions on foreign buyers owning property in South Africa. Funds can be transferred from overseas into a local trust account that is usually managed by the estate agent that brokered the sale or the attorney that registers the transaction. The expat buyer will receive a “Deal Receipt” from the South African bank where they deposited money. This is an important document because it will have to be submitted to the South African Reserve Bank should the buyer want to sell the property and return the funds to their home country.

Non-resident property owners are not, however, allowed to borrow more than 50 percent of a property’s purchase price and they will have to provide the rest of the funds themselves. Expats in South Africa on a work permit, however, are considered to be residents in the eyes of the Reserve Bank and therefore aren’t subject to the 50 percent loan restriction.

Should an expat decide to sell their Cape Town property at a later date, they will have to pay capital gains tax. The buyer is required to pay the necessary amount directly to the South African Revenue Service (SARS) and pay the remaining amount to the seller.  Expats that rent their property out will have to register for income tax in South Africa even if they benefit from a double taxation agreement and only have to pay tax in their home country.

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