19 Feb Retirement in South Africa
Who qualifies for a retirement visa?
Retirement is best for an individual who wishes to reside in South Africa but has no intention or need to work whilst here. Even though labelled ‘retirement’, this category is available to any age person, if they have the finances (and comply with all other requirements).
How does one show they have the finances to qualify for retirement?
There are two tests. An applicant must comply with one of the two and indicate on their application which test they wish to use. They cannot use a combination of both tests to meet the criteria.
Net Worth is based on all of your assets – liquid and not, combined. In other words, the department of home affairs will look at property owned, portfolio investments as well as bank accounts. If the amount is over the gazetted amount needed per month, you will qualify for retirement based on the finances.
This calculation for temporary residency is relatively straight forward: R37 000 x 48 months =R1 776 000. However, when it comes to permanent residency the test gets more complicated as it is unknown how many months an applicant will need to have R37 000. So in the case of permanent residency, the more assets you have to show, the better.
The alternative test that can be used is ‘minimum monthly payment’ – in other words, a pension or amount of money that you will receive indefinitely. Stocks and investment dividends do not count towards this income test as theoretically the funds can be used up and thus the money will not be received indefinitely. Therefore, if an applicant receives R37 000 or more per month from an irrevocable annuity – and has proof – the basis of this test is complied with and the finances will be sufficient to retire in South Africa.
What if I am married – do we need to show double the finances?
Not necessarily. If you are married, it may be best to have one person apply as the ‘retired visa’ holder and one as an ‘accompanying spouse’. This way, double the finances do not have to be shown.