Capital gains tax is tax on the profit you make when you sell an asset for more than it cost. In South Africa it is not a separate tax: part of the gain is added to your taxable income for the year and taxed at your normal rate.
This article is general information for individuals, using the 2026/27 tax year. It is not tax advice. Confirm the details with SARS or a registered tax practitioner.
How capital gains tax is worked out
- Work out the gain. The selling price, less your base cost: what you paid, plus allowable costs such as transfer fees and improvements.
- Take off the annual exclusion. The first R50,000 of your total gains in a tax year is not taxed.
- Apply the inclusion rate. For individuals, 40% of what is left is added to your taxable income.
- It is taxed at your marginal rate. With a top marginal rate of 45%, the most an individual pays is 18% of the gain.
A worked example
Say you sell shares for a gain of R300,000, it is your only gain this tax year, and your marginal tax rate is 36%.
- Gain after the annual exclusion: R250,000
- Added to your taxable income at 40%: R100,000
- Tax at 36%: R36,000
To work out your own, with your income and the tax brackets applied, try the free capital gains tax calculator.
Selling your home
The first R3,000,000 of the gain on your primary residence is excluded. Only the part above that is treated as a capital gain, and the rules can differ if you used part of the home for business or did not live in it the whole time. To see how selling costs fit into the bigger decision, try the rent vs buy calculator.
What is usually not taxed
- Growth inside a tax-free savings account.
- Growth inside a retirement fund, such as a retirement annuity.
- Personal-use items such as your car or furniture, in most cases.
When you pay it
You declare capital gains on your annual income tax return for the year you sold the asset. Capital losses can be set off against gains, and an unused loss can be carried forward to later years. Keep records of what you paid and when, because you need them to work out your base cost.
To see the income tax on your salary, try the free tax calculator.
