Botswana Mortgage Rates and Property Finance for Non-Citizens

Botswana has three broad kinds of land: tribal land allocated by land boards, state land and freehold. Non-citizens may generally buy freehold and state land in urban areas such as Gaborone and Francistown, but tribal land is not normally available to foreigners. A bank will lend only against land it can register a charge on, so confirm the category at the deeds registry before anything else.

A conveyancing attorney does this search. Read the Botswana buying guide for the wider legal position, and see the Botswana property page for the market.

Lenders favour applicants with a local salary, a work permit and an account, and some ask for a guarantor or a larger deposit when the borrower is on a fixed-term contract. If you are an expatriate employed by a mining, diplomatic or development organisation, ask your employer whether it has an arrangement with a bank; employer-linked schemes are sometimes the easiest path.

Expect between roughly half and seven-tenths of value lent, over up to 20 or 25 years. Loans are in pula, and most are variable, linked to the lender's prime rate, which follows the central bank's policy rate. A rate rise therefore reaches your monthly payment quickly.

If you earn in dollars, rand or sterling, borrowing in pula places the exchange rate between you and your repayments. A weaker pula lowers the dollar cost of repayment, a stronger one raises it; either way the move affects what you recover on sale. Keep an eye on the central bank's exchange rate policy and consider how long you plan to hold.

1. Find a freehold or state land property and ask the seller for the title deed.
2. Instruct a conveyancer to search the deeds registry for charges and disputes.
3. Provide the bank with your permit, payslips and statements, and obtain a valuation.
4. Sign the sale agreement, pay transfer duty and register the transfer.
5. Insure the property and arrange for rates and utilities.

Registry processing can be slow, so allow two to four months.

Transfer duty is charged on the purchase and can differ for citizens and non-citizens, so ask your conveyancer for the present rate.

Because many foreign buyers are on fixed-term contracts, think about the day you leave. A property bought on a work permit has to be sold or let when the contract ends, and the pula-denominated sale price returns to you in a currency that may have moved. Ask the conveyancer how long a sale typically takes in your target suburb, and whether the transfer duty paid on purchase can be recovered or offset.

If you plan to let the house, check the lease terms and tenant protections, and confirm whether rental income is taxable in Botswana and in your home country. Banks sometimes ask for a rental agreement before they count rent towards affordability. A short, clear paper trail makes the whole process smoother, from valuation to the day the keys change hands.

Many foreign buyers fund the purchase from savings or from borrowing at home, since local credit is limited. Employers sometimes provide housing instead of a purchase. If you remit funds from abroad, keep records of the transfers for the bank and for tax. Before committing, check what rental yields and resale demand look like by looking at cheaper properties in Botswana, or send us a note via the contact page.