What Is Capital Gains Tax in Simple Terms
Only if the gain exceeds R2 million. Below that, no CGT applies to your main home.
What Triggers CGT
CGT applies when you sell property, shares, cryptocurrency, or a business for more than you paid. It also applies to donations and certain asset transfers.
How Much You Pay
Calculate your gain, subtract the R40,000 annual exclusion, include 40% of the remaining gain in your taxable income, and pay at your marginal rate. Maximum effective rate is 18%.
What Is Your Base Cost
Your base cost includes the original purchase price, transfer duty, legal fees, improvement costs, and selling costs like agent commission. Keep all receipts.
Frequently Asked Questions
Do I pay CGT on my primary residence?
Only if the gain exceeds R2 million. Below that, no CGT applies to your main home.
How do I report CGT?
Declare on your ITR12 tax return and keep supporting documents for 5 years after disposal.
Can losses reduce income tax?
No. Capital losses only offset capital gains. Unused losses carry forward indefinitely.
Need Help With Your Tax?
Admin Boss is a registered tax practice with over 20 years of experience helping South African individuals and businesses navigate SARS.