Taxes Payable on the Disposal of Your Property

  • Income Tax

If a property is purchased with the intention of selling it in order to make a profit (i.e. speculation), the profit thus generated is deemed revenue. Revenue gains are subject to taxation at the full marginal tax rate of the taxpayer.

  • Capital Gains Tax

The sale of a home that was purchased with the intention of keeping it to live in will result in a capital profit, which is subject to Capital Gains Tax. However, CGT is not payable on the first R2million of capital gain on the sale of your primary residence. Capital Gains tax is also payable on the sale of your second home and investment properties (those that generate a regular income stream or are held for capital growth) or holiday home. The gain is calculated from 1 October 2001. A natural person or Special Trust pays income tax at his/her/its marginal tax rate on 33.3% of the capital gain calculated from 1 October 2001. A company, CC or Trust pays income tax on 66.6% of the capital gain calculated from 1 October 2001.