Capital Gains Tax on Real Estate

For homeowners concerned about their liability of Capital Gains Tax (CGT), PATC offers professional accountant services to assist with all aspects of this real estate tax. Capital Gains Tax is payable on the sale of real estate in South Africa. This tax is therefore something that affects every South African who is planning to sell property. Liability for CGT varies depending on whether the property seller falls into one of the following groups:

  • They are a resident selling their primary residence
  • They are a resident selling property that is not their primary residence
  • They are a non-resident
  • They are a non-natural person such as a company, close corporation or trust

Your liability will differ according to the group that you fall under, with different percentages of CGT owned for each type of homeowner. CGT is only applied to the profit that is made on a property when it is sold, but is not applied to the entire value of the property. Assisting you in determining your liability is one of the first steps that PATC will take when assessing your CGT requirements. Other things to keep in mind regarding CGT include the following:

  • Residents are liable for the payment of Capital Gains Tax on the disposal of any asset, subject to certain limited exceptions, whether the property is a primary or non-primary residence.
  • Non-residents are only liable to pay CGT on the disposal of the following:
  • Immovable property situated within the country, including any right or interest in immovable property, plus an interest of at least 20% in a company where 80% or more of the net assets value of the company is attributable, directly or indirectly, to immovable property in South Africa.
  • Assets of a permanent establishment of a non-resident in the case of a sale that is conducted in South Africa.
  • For natural persons the maximum rate of CGT is 10%, while for non-natural persons such as companies and close corporations, the rate is 15% and for trusts 25%.
  • South African residents do not pay Capital Gains Tax on the first R1 million in profits made on the sale of their primary residence. Non-residents do not qualify for this exemption if their primary residence is not in South Africa.

To learn more about Capital Gains Tax and how it affects you directly as a homeowner, contact PATC to make an appointment with a helpful and knowledgeable accountant in South Africa.