Advice and Opinion

Expert advice for South Africans looking to purchase property internationally

The recent major decline in the value of the Rand has had serious impacts on South Africa’s finances, and investments held in local shares may well not provide the sort of growth investors saw a few years ago. With all of this in mind, many investors are now seeking opportunities for economic growth outside South African borders.

Sandra Woest, Senior Manager at Henley & Partners South Africa says, “With this background of currency volatility and decline in business confidence, a new investment strategy that focuses on greater global exposure makes good sense for high net worth South Africans.”

Henley & Partners is the global leader in residence and citizenship planning, advising clients on international real estate investment which may also deliver a second citizenship or residence.

“Considering the current economic outlook for the country, it’s wise to review your investment strategy and to reassess where you invest, both in terms of the location of the investments and in regards to asset classes,” advises Woest.

Henley & Partners has recently published the 5th edition of the International Real Estate Handbook (IREH) which provides an unparalleled insight into this complex area of international real estate, and is an essential tool for individuals buying property abroad, as well as their private bankers, tax consultants, lawyers and fiduciaries. For those with the means to do so, acquiring property in another region, such as Europe, is worth considering. In addition to an investment in a solid asset class known to perform over time, you may be able to acquire a passport or residence permit from the destination country.

“This offers major benefits to those who travel regularly or who have business interests across borders. Residence or citizenship in the European Union (EU), for example, allows you to travel to all 28 member states without the delay of applying for visas and can give you extensive visa-free travel in many other parts of the world,” Woest continues.

For instance, Malta, a Mediterranean archipelago consisting of five islands with a small population of just 400,000, is one of the Eurozone’s better-performing economies, with a growth expectation of over 3% for 2015. The Malta Individual Investor Programme (MIIP) offers investors the opportunity to gain an EU passport, with visa-free access to more than 160 countries.

Malta boasts an excellent reputation, having developed an effective business infrastructure over the past 15 years and positioning itself as an international business hub. Since joining the EU in 2004, its financial industry has experienced constant growth, offering a number of advantages for business people.

The Malta property market is correcting itself after the global financial downturn, and the demand for property is growing steadily with less new properties entering the market. The MIIP offers an option to invest in real estate for a five-year period, amongst other conditions, allowing the recoverability of those funds after the required holding period.

The Handbook provides 18 country-specific chapters, unique tables with international overviews and comparisons, covering topics including purchase costs, tax rates and inheritance laws relating to real estate, and many more relevant aspects.

“This is a really useful tool for anyone exploring the idea of acquiring property outside South Africa. You’ll gain an understanding of the tax issues and inheritance laws applicable and an overview of some of the key residence and citizenship programs, so it’s a good starting point when carrying out your research,”
Woest concludes.