UK Mortgages for Expats & Foreign Nationals Living in South Africa
UK nationals relocate to South Africa from the UK for all kinds of reasons. These include the great scenery, the warm and sunny weather, the modest cost of living, the job opportunities and the way English is widely spoken there, which means they don’t tend to face big problems with communication. Some people opt to relocate to South Africa permanently, whilst other people settle there with a view to returning to the UK one day in the future.
One problem you might face if you’ve moved to South Africa and want to invest in property back home is being able to finance the purchase. It can be hard to convince lenders in South Africa to take you on and approve your application when you want to purchase a UK property, which means you may need to look to other forms of funding.
Thankfully, help is available from Expat Mortgages UK and with our help, you could be able to complete the transaction without setting foot back in the UK.
Getting a UK Expat Mortgage From South Africa
The process of getting an expat mortgage whilst living in South Africa doesn’t have to be as tough as you might expect. With the right expertise and support behind you, you could complete the deal within 12 weeks or even less – and crucially, you can do it all remotely from South Africa without having to return to the UK!
UK Expat Mortgages For South African Residents: Who Qualifies?
If you are based in South Africa and do want to take out a mortgage for a property back in the UK, you will normally need to either be salaried or self-employed. Self-employed people usually need to show up to two years of accounts to prove that their income is stable and that there is minimal risk for the lender. However, your money can be in any currency.
Do I Need to Raise a Large Deposit for a South African UK Expat Mortgage?
In most cases, you will need to raise at least 25% deposit of the value of the property. If you’re in a position to pay as much as 40%, you could get access to particularly great rates and deals.
Do I Need a Detailed UK Credit History?
A strong UK credit history can help, but not having one won’t necessarily mean being turned down for a South Africa expat UK mortgage. We work with flexible lenders that know not everyone who wants to buy property in the United Kingdom will have a long and detailed UK credit history. Learn how to transfer your credit history to the UK as an Expat.
Why Choose Us When You Want a South African Expat Mortgage?
We believe there are many fantastic reasons to work with us if you need help arranging a UK expat mortgage from South Africa. We have years of experience behind us, we work with all of the lenders in the market, including those specialists and most flexible lenders and we work tirelessly to ensure you successfully secure your Expat Mortgage in the UK.
We also specialise in various different expat mortgage options, including:
Expat Buy-to-Let mortgages: If you’re seeking to make money from property in the UK whilst you’re based in South Africa, a BTL mortgage maybe ideal for you.
Expat Residential mortgages: A Residential mortgage could be perfect for you if you wish to return to the UK in future and wish to buy property before prices increase further. By the time you get back to the UK, the value of your home could have risen considerably.
Can I Get Help With Remortgaging?
Yes, we can help if you have been considering remortgaging a property that you already own. This can mean getting better terms and rates than you already have, and it can also help with equity release so you can fund other ventures.
Overcoming Hurdles When Buying UK Property from South Africa
As we mentioned before, purchasing property in the UK from South Africa isn’t always the most straightforward process due to fluctuations with currencies, having less access to lenders back home, difficulties with verifying income and having a reduced range of mortgage products to choose from.
However, we can work closely alongside you to help you overcome all of these hurdles and make your plans a reality.
We give you access to a dedicated case manager, bespoke UK expat mortgage advice and create strategies that help you keep exchange rate risks to a minimum. We will look closely at your situation before introducing you to lenders and mortgage products that will suit you down to the ground.
UK Mortgages for South African Residents: The Highest Standard of Support
From the moment you first Contact us, we will provide the highest calibre of support. We’ll look closely at your situation so we can decide upon the best way to help you, we’ll work with you to get all the vital paperwork you need for your application and we’ll talk you through all your expat South Africa UK mortgage options to help you come to the right decision.
Once you’ve decided upon a lender from the options we’ve presented, we will handle the whole application on your behalf and give you quotes for essential services like solicitors, insurance and valuations. When your formal South Africa UK mortgage offer comes through, we’ll explain the terms to you clearly to ensure you fully understand everything. After this, the deal will be completed and the title of the property will be transferred to you.
Tax Considerations of a UK Mortgage When Living in South Africa
Rental Income from UK Property
If you rent out your UK property while living in South Africa, you are responsible for reporting that rental income and paying UK income taxes under the UK Self Assessment system. You can reduce the amount of UK tax you pay by claiming qualifying expenses, which include mortgage interest, maintenance, letting agent fees, and insurance.
As a South African tax resident, you are taxed on our worldwide income which includes rental income from properties situated overseas. Therefore, you must declare your UK rental income to SARS in your South African tax return. However, the UK–South Africa Double Taxation Agreement (DTA) will prevent the same income from being taxed twice. Generally, taxes paid in the UK can be used as a foreign tax credit against your South African income tax owed on the same income.
UK Property Rental Income – A Practical Example
Let’s say you live in South Africa where your property in the UK is being rented out. You are still liable to declare that rental income and pay income tax in the UK via the Self Assessment regime. You can deduct allowable costs such as mortgage interest repayments and management fees, however, to ease your tax burden. You must also declare this income in South Africa, as SARS tax residents on their worldwide income. Although the UK will tax you first, as the source country, in terms of the UK–South Africa double taxation treaty, you will usually be permitted to offset tax charged in the UK against the same income on your South African tax bill.
Mortgage Interest in the South African Tax System
It all depends on how you use the UK property whether or not the mortgage interest is deductible for South African tax purposes. If it is a rental home, then you will be able to take a deduction for the mortgage interest and any applicable expenses against your rental income when you report it in South Africa. If you just use a property for personal enjoyment (such as a holiday home or second home), then the interest will not be deductible under SARS guidelines.
Selling Your UK Property
If you make a sale of your UK property and make a profit, it is likely that you may be liable for UK capital gains tax (CGT). As a South African tax resident, you will also be liable for South African CGT on your worldwide assets. This means you would have to declare that gain in South Africa, even if you already paid CGT in the UK.
As indicated in earlier paragraphs of this article, the UK’s Double Taxation Agreement with South Africa generally avoids double taxation but offers some relief, where South Africa will provide a tax credit for a portion of the UK CGT paid. SARS also provide some reliefs, based on the term of ownership or by offering an exemption for primary residences, so it is essential to understand what could apply in your circumstances.
Reporting Foreign Assets to SARS
South Africa has strict regulations regarding foreign assets declaration. If you own a property in the UK – or have foreign bank accounts, foreign investments, or foreign trusts – South Africa requires you to declare them to SARS and may require you to disclose any foreign income and gains, and, in many cases, submit a detailed Statement of Assets and Liabilities, at tax time.
If you fail to disclose your foreign assets to SARS, you could face significant penalties. It’s important to keep track of these requirements so you can remain compliant under South Africa’s tax laws.
Work with a Cross-Border Tax Specialist
It can be challenging to navigate the tax laws in the UK and South Africa. You risk double taxation, making mistakes in reporting requirements, and missing opportunities to claim deductions. For this reason, it is highly recommended that you discuss your situation with a tax specialist in UK–South Africa cross-border tax matters. A qualified professional can help you with the requirements of both jurisdictions, while legally lowering your tax obligations, and optimising your international financial affairs.
Smoother South African UK Mortgage Applications
As a specialist Expat Mortgage Broker, we pride ourselves on the way we keep stress to a minimum when it comes to South Africa UK mortgage applications. We know our clients lead very busy lives, which is why we aim to carry out as much of the hard work as possible ourselves. We’ve also made it easy for you to see how your application is going by giving you access to a special online portal that you can log into any time, day or night.
UK Mortgages For Expats in South Africa – Further Information
Here is some other information you may find helpful if you’re planning on purchasing a UK property from South Africa.
You don’t need a UK bank account in order to take out a mortgage for a UK property, although this may certainly help to streamline the process. When it comes to Loan to Value (LTV) ratios, you’ll normally get a 75% LTV maximum, although in some cases you might be offered one of 80% if certain conditions are met.
Factors that can influence the amount of time it takes for your application to be approved include the kind of mortgage you’re taking out, how quickly you can get important documents over to the lender and if a chain is involved. We will work with you to speed things up as much as we can without putting you in any sort of financial or legal risk.
Try our Expat Mortgage Calculator UK today to discover monthly mortgage costs and the deposit needed.
UK Expat Guide to Living in South Africa: Best Cities, Regions & Property Hotspots
If you’re thinking about leaving the UK and want to relocate to a place with first-class scenery, a warm climate and a vibrant cultural scene, South Africa could be the option for you. The country has strong ties to the UK, and English is spoken widely, which makes it easy for expats to feel at home in South Africa right away.
Cape Town is very popular amongst British expats and is famous for its vibrant creative scene, spectacular coastal views and world-class restaurants. Johannesburg is the biggest city in South Africa and is ideal for professionals working in fields like finance, tech and media.
Durban offers great weather all year long alongside beautiful beaches and a relaxed way of life. Pretoria is a fantastic option if you need somewhere with great schools and a quieter atmosphere. Stellenbosch and Franschhoek are in the Cape Winelands and give you easy access to some of the country’s greatest mountains and vineyards.
Gqeberha was once known as Port Elizabeth and is famous for its glorious beaches, wildlife reserves and relatively low cost of living when compared to bigger cities in South Africa.
South Africa may be further away than some of the countries UK expats relocate to, but its lifestyle, scenery and climate can make the extra distance more than worthwhile.
Get The Ball Rolling Today With Your South African UK Mortgage Application
Although buying property in the UK when you’re based outside of the country can seem difficult, it can be much easier than you think. Our South Africa UK mortgage experts have so many years of experience behind them and can use this expertise to ensure your plans are successful.
Our vast contact list also ensures that you’re getting access to some of the most flexible and helpful lenders on the market, who you may have never otherwise encountered. Now is the time to get in touch if you’re ready for your consultation.
Start The Process Today and Book Your South Africa UK Mortgage Consultation – Get in touch today!