The South African Reserve Bank’s (SARB) updated harmonised Balance of Payments (BoP) codes are an important development that foreign buyers of South African property should take note of. Using the correct coding when introducing funds into South is crucial to ensure the seamless repatriation of those funds when the property is eventually sold.

The new codes which will come into effect from 11 August 2026.

South Africa remains an exchange control jurisdiction and the movement of capital across borders are closely regulated. The BoP reporting is the electronic message system authorised dealers (commercial banks) use to report cross-border transactions to the SARB.

No Room for Mistakes with BoP Codes

For foreign buyers, the BoP code used when bringing money into South Africa to finance a property transaction is not about ticking a box. It declares the nature of the funds to the SARB and the classification depends on the type of structure for the investment as well as what the property will be used for.

There is no room for mistakes. The correct BoP classification will enable you to transfer your proceeds abroad when exiting the South African property market, while an incorrect code can result in delays when attempting to transfer funds or even freezing of your capital.

With more than 800 categories and subcategories on the updated BoP list, it is evident that detailed and specific coding matters.

Furthermore, it is crucial that the BoP code used is consistent with the taxpayer's disclosure to the South African Revenue Service (SARS). From a tax compliance perspective, it is very important that your coding match your tax return, as any inconsistency will raise flags with SARS.

Aligning with International Standards

Authorised dealers must report all cross-border transactions to the SARB in accordance with exchange control regulations. The BoP reporting system provides for the accurate and comprehensive reporting of all data on transactions, irrespective of the amount. 

The updated BoP framework aligns with the International Monetary Fund's Balance of Payments Manual (Version 6). It is intended to standardise category codes structures, descriptions, direction rules and supporting information requirements for transactions across borders, FNB said in a note to clients.

“The harmonised requirements apply to both inward and outward transactions, including import and export payments, advance payments and receipts, and other cross-border payments requiring BoP reporting.”

According to the bank, the harmonised structure is aimed at improving reporting accuracy, to ensure consistent BoP classification and enhance the quality of data used by SARB for economic analysis, financial stability monitoring and policy formulation. It should also improve the straight-through processing of payments within the Common Monetary Area (CMA), making qualifying transactions more efficient.

Get It Right from the Start

Given South Africa's exchange control framework, foreign real estate investors buying property in the country, should pay attention that the correct BoP classification is used from the outset. 

If you are unsure about the appropriate code applicable, it is advisable to check pro-actively to avoid the risk of complications arising when you want to transfer your money.

If your coding is incorrect, your money will not flow, and if your SARS record is inconsistent with the code used, you face big problems. Getting it right from the start is your best option.

Submitted by Foreign Buyer Property Solutions