15 Oct Which financial test should you use for your retirement visa?
Retiring in South Africa has long been a top choice for foreigners. From the stunning shores of Cape Town to the bustling energy of Johannesburg, it’s easy to see why so many flock to this beautiful country for a retirement lifestyle of laid back leisure and excitement.
Before packing a bag (and applying for your retirement visa), there are two accepted tests an applicant can take to prove their financial stability – the Net Worth test and the Prescribed Minimum Monthly Payment test. An applicant will only need to comply with one of the two tests with the specific test they have decided to use indicated on the application.
Net Worth Test
The Net Worth test is for temporary and/or permanent residency based on retirement. The test accounts for the value of all accumulated assets – both liquid and not. The applicant must provide proof that the total amount of assets would equal at least R37 000 per month for the period of their stay.
Thus, for temporary residency, an applicant would need to show R1,776,000 for a period of four years. For permanent residency, one would need to show at least R5,000,000, but it depends on age, amongst other factors.
The Department of Home Affairs will assess any property you own, portfolio investments and bank accounts; if the amount is more than the stipulated amount required, you will qualify for a temporary residency retirement visa based on your finances.
Prescribed Minimum Monthly Payment
The Minimum Monthly Payment test is meant for individuals that receive a pension, as the requirement is that the funds received must be from an irrevocable annuity. Therefore, to qualify, an applicant will need to provide proof of pension or another form of irrevocable annuity that is received each month and is equal to or in excess of R37,000. The amount that needs to be shown monthly will be the same for temporary and permanent residency.
With regards to permanent residency, either test above can be used. There is also a third option which is only available for permanent residency: Financial Independence. A person of any age must provide proof of R12 million in assets. If the Department of Home Affairs is satisfied with the proof of assets they will request a payment of R120,000 to finalize the permanent residency.
If you would like more information regarding your visa options to retire in South Africa, either temporarily or permanently, please contact our team for an assessment of your options and further assistance.