Capital gains tax when you sell property in South Africa

Every property sale by a South African tax resident is a capital gains tax event, including the sale of your home, but that is not the same as owing tax. What you owe depends on whether it was your primary residence, the size of the gain after allowed deductions, and who owns it.

Which exclusions apply depends on the date of disposal, not the date transfer registers. With a suspensive condition such as the buyer's bond approval, that is the day the condition is met; otherwise, the day the agreement is concluded (SARS's Comprehensive Guide, section 6.3). SARS's Budget FAQ says the liability arises when the sale agreement is signed. The date also fixes the tax year, which runs from 1 March to the end of February.

Where the new amounts come from. The Minister of Finance announced them in the 2026 Budget on 25 February 2026, and SARS's rates page shows them. National Treasury's Budget Review (Table 4.6, page 41) lists the primary residence exclusion going from R2 000 000 to R3 000 000 and the annual exclusion from R40 000 to R50 000, from 1 March 2026. SARS's Budget FAQ gives 2 March 2026. As 1 March 2026 was a Sunday, the difference matters only for an agreement that became unconditional that day.

How sure are the new amounts? Not fully. SARS's primary residence page, which we read on 20 October 2026, still shows R2 000 000. As we read SARS's Comprehensive Guide to Capital Gains Tax (Issue 9), paragraphs 45(1A) and 5(3) of the Eighth Schedule let a Budget announcement change the primary residence and annual exclusions from the date it names, for 12 months, subject to Parliament passing legislation in that time. SARS's Budget FAQ is likewise subject to Parliament's legislative process. We have not found legislation containing the new amounts: Act 3 of 2026, signed on 31 March 2026, does not mention the Eighth Schedule or capital gains tax, as we read it, and the Taxation Laws Amendment Act 5 of 2026 (Government Gazette 54448, 1 April 2026) amends paragraph 5 of the Eighth Schedule but not paragraph 45, and its new paragraph 5 proviso still reads R40 000.

Treat the new amounts as announced, not as settled law. The 12 months run to 28 February 2027, so check the position for a later sale, and ask a registered tax practitioner which figures apply to yours.

On the announced figure, the first R3 000 000 of the capital gain on a primary residence is disregarded (R2 000 000 for the earlier sales above; see the status note in the first section). It is not a lifetime allowance: it applies to each disposal, so a seller who moves three times gets it three times, but only one home can be your primary residence at a time.

To qualify, an interest in the residence must be held by a natural person or a special trust, and you or your spouse must ordinarily live in it as your main residence and use it mainly for domestic purposes. Land goes with it up to two hectares, if it is used mainly for private purposes with the house and sold to the same buyer at the same time. A larger smallholding is partly excluded and partly not.

A house in a company or an ordinary trust gets neither exclusion, whoever lives in it. Both belong to natural persons and special trusts only.

A second rule, for lower prices. SARS's primary residence page describes a rule that disregards the whole gain, with no need for base cost, where the proceeds are at or below a set amount (R2 million in the wording we read). It does not apply if you were not ordinarily resident throughout the time since 1 October 2001, or used part of the home for trade. We have not confirmed whether that amount changed for 2026/27, so ask a registered tax practitioner before relying on it.

The exclusion is per residence, not per person. As we read paragraph 45(2) in SARS's Comprehensive Guide (section 11.2.2), one exclusion is shared between those who hold an interest in the home and live in it as their primary residence. A co-owner who lives elsewhere gets none, and one who lives there sets the whole exclusion against their own share of the gain. SARS's example is spouses married in community of property, in the table. The R50 000 annual exclusion is per person and covers all your capital gains for the year. Ask a registered tax practitioner how this applies to your own co-owners. Selling because of a divorce? See selling a house during a divorce.

The gain is the selling price less your base cost. Base cost is not simply what you paid: it is what the property cost you over the whole time you owned it, limited to the categories the Eighth Schedule allows.

Improvement against repair is the distinction that costs sellers real money. A capital improvement is added to base cost, as long as it is still part of the property when you sell (SARS's base cost page). A repair is not, however necessary it was: replacing a burst geyser with an identical one is a repair, while adding a bedroom, garage or second bathroom is an improvement. Keep the invoices for as long as you own the house, because SARS wants proof, not an estimate.

Interest on the bond that bought the house does not add to base cost: SARS's base cost page lists interest among the current costs that are left out. It does not say whether bond registration and cancellation costs count, and we have not found a primary source that settles it, so ask a registered tax practitioner.

If you bought before 1 October 2001, when CGT started, you are not taxed on the growth before that date. SARS's base cost page names three ways to set a value at that date: the market value on 1 October 2001, time-apportionment, or 20% of the proceeds. We have not confirmed the conditions for each, including when a valuation had to be made, so we do not set them out. A registered tax practitioner can work out which applies to you and what it gives.

A house bought for R1 200 000, improved along the way, and sold for R3 400 000 in a sale that became unconditional on or after 1 March 2026. As a primary residence the whole R1 709 500 gain is inside the exclusion and nothing is payable. As a rental flat the tax comes to R258 882 if all of the included amount were taxed at 39%: 15.14% of the gain and 7.61% of the selling price.

The 39% is an example rate, one of the marginal rates on the 2026/27 scale (Budget Review, Table 4.4). The added income is taxed across the brackets it spans, so your own figure depends on your other income.

Agent commission is an incidental cost of disposal, so it comes off the gain. Selling privately, with no commission to deduct, leaves a slightly larger taxable gain on a property that is not your primary residence. Other seller costs are in the cost of selling.

Put your own figures into the what you keep when you sell calculator to see the capital gains tax, the commission and what is left, for an agent or a private sale. Ready to sell without an agent? List your property on Privately.

CGT is not a separate tax with its own rate. A percentage of your net capital gain, the inclusion rate, is added to your taxable income and taxed at whatever rate applies to you. It is the biggest difference between owning property personally and through a company or trust.

The last column multiplies the inclusion rate by the highest rate that seller can pay, so it is a ceiling. Each figure matches the effective rate on SARS's rates page.

An ordinary trust selling a house includes 80% of the gain and pays a flat 45%, so up to 36% of the gain, against 18% for an individual at the top of the scale. It gets no primary residence exclusion and no R50 000 annual exclusion, whoever lives in the house. A company pays up to 21.6% of the gain, and getting the proceeds out of it to you can be a further taxable step.

The 36% is the trust-level ceiling, not the only outcome. As we read SARS's Comprehensive Guide (chapters 14 and 15), a trust's gain can instead be taxed in a resident beneficiary's hands, or attributed to the person who donated the property to the trust (paragraphs 68 to 72).

That does not make a trust the wrong structure: estate planning, creditor protection and succession are often good reasons. But moving your family home into a trust or a company is itself a disposal for CGT (Comprehensive Guide, section 6.1), on top of transfer duty and the cost of the move, and donations tax can also arise. The CGT on the eventual sale belongs in that conversation too. Get advice from a registered tax practitioner before the transfer.

How a trust or company goes about selling is in owning property in your own name, a company or a trust. Letting out several properties through one is in rental property in a company or trust.

The gain is apportioned wherever the property was not wholly and continuously your home, but the exclusion itself is not cut back: it is set in full against the part of the gain that qualifies. Common cases:

• Part of the house used for trade. Whether or not you claimed a deduction, the gain is split between the domestic and trade portions, often by floor area, and only the domestic portion gets the exclusion. If the home is not used mainly (more than half) for domestic purposes, none of it qualifies.
• Periods you did not live there. The gain is apportioned over the years you owned the property since 1 October 2001, and years it was not your primary residence get no benefit, apart from the two rules below.
• Is there a six-year rule? We found no rule by that name in the SARS pages we read. Two absence rules come closest, and one of them is where a six-year let goes wrong.
• Up to two years away (paragraph 48). You count as still living there during a continuous absence of up to two years if you vacated it and put it on the market to move into a new primary residence, were building a home on the land to live in, or it was accidentally made uninhabitable, such as by fire or flood. This does not cover a period when the house is let.
• Up to five years of letting (paragraph 50). A let home can keep counting as your primary residence if you lived in it for a continuous year before and after the let, let it for no more than five years, had no other primary residence meanwhile, and were either temporarily out of the country or working or running a business more than 250 km away. It is all or nothing: let it for six years and all six count as non-residential use. The wording is technical, so ask a registered tax practitioner.

CGT falls due on assessment, which can be long after the sale. There is no CGT invoice at registration, and the conveyancer does not deduct it unless you are a non-resident.

You declare the disposal in your income tax return for the tax year in which the date of disposal falls, and settle it on assessment. A sale that became unconditional before 1 March 2026 uses the earlier R2 000 000 exclusion even if transfer registered months later.

A provisional taxpayer must build the taxable gain into their provisional estimates. Penalties can apply to an estimate that is too low, but we have not confirmed exactly when they start, so ask a registered tax practitioner.

A registered tax practitioner works out your own CGT. SARS publishes the rates and exclusions on its pages, listed under Sources, so check the figures there for your sale date. This is general information, not tax advice.

Your conveyancing attorney does not work out or collect your CGT. The exception is a seller who is not a South African tax resident: the buyer must withhold part of the price and pay it to SARS as an advance, under section 35A. See selling property as a non-resident.

Inherited property is a case of its own: death is a disposal by the deceased, with a larger annual exclusion of R440 000 in that final year. See selling an inherited house.

Situations that call for a registered tax practitioner:

• You bought before 1 October 2001 and need the valuation date value chosen properly.
• The property was your home for part of the time and a rental for the rest.
• It is held in a trust or a company, is being moved into one, or is held jointly with someone you are not married to.
• Part of the property was used for a business, whether or not you claimed a deduction.
• You are relying on the proceeds rule for a lower price.
• The sale became unconditional close to 1 March 2026, or after 28 February 2027.
• You are not a South African tax resident, or you are emigrating.