Capital gains tax (CGT) is payable when you sell an asset that has increased in value since you bought it. For residential property it may be 18% or 28% of the gain (not the total sale price). Usually, when you sell your main home (or only home) you don’t have to pay any CGT.
Is CGT payable on sale of family home?
Normally if you sell (or otherwise dispose of – for example, if you give away) your only or main home, you do not have to pay capital gains tax (CGT) on any profit if it has been your only or main home throughout the entire period of ownership.
Do you have to pay CGT when you sell a property?
If you give a property to your spouse or civil partner, or to a charity, there won’t be any CGT to pay. If you inherit a property (and any inheritance tax due has been paid by the estate) then there won’t be any further tax to pay until you sell the property.
Is the sale of a primary home exempt from CGT?
There are many tax tests implemented by SARS to determine whether to implement a capital or revenue tax. For instance, if the buyer purchased a home for personal use (primary residence) this will be exempt from CGT, with certain limitations. SARS considers the first R2 million gain on the sale of a primary home as CGT exempt.
Can a house be considered a main residence for CGT?
You can generally claim the main residence exemption from CGT for your home. To get the exemption, the property must have a dwelling on it and you must have lived in it. You’re not entitled to the exemption for a vacant block. Generally, a dwelling is considered to be your main residence if:
Can a sole owner of a property reduce their CGT?
Remember that everyone has a CGT allowance, so if you are the sole owner of a property, you can double your allowance by sharing ownership with your spouse. Basic rate taxpayers pay lower CGT, so if you are higher-rated and your spouse isn’t, you could reduce your CGT bill by transferring all or part of the property into their name.
