Capital Gains Tax on Land

When it comes to determining Capital Gains Tax on land that you plan to dispose, PATC will be able to assist you throughout every step of the process. Capital Gains Tax (CGT) is a tax that is given on any capital gain, when certain assets such as investments or property are sold, destroyed or disposed of in any way. While residences meeting certain criteria may not be excluded, other assets may not be included. These include the following:

  • A primary owner-occupied residence up to a maximum of R1 million, including up to two hectares of adjacent vacant land.
  • All private motor vehicles, as well as personal belongings and other items.
  • Retirement benefits, selected first hand policies such as long-term insurance plus endowments and retirement annuities.

While you will not be charged on the above mentioned two hectares of adjacent land, you will be taxed on the actual land that you plan to use for property development. To determine whether your land will be taxed, your professional accountant will be able to assist to find out whether your land is liable for CGT. Inclusions for CGT include investments such as shares and unit trusts, second hand policies, any profit resulting from the sale of property not used as a primary residence, coins, certain aircraft and boats, plus land.

To learn more about the Capital Gains Tax and other services offered by the leading accountant South Africa services company, contact PATC today.