Written by the Independent Editorial Team · Reviewed & Verified by Solly Maanaso, CA(SA)
Capital gains tax (CGT) is not a separate tax in South Africa — it is part of the normal income tax system, governed by the Eighth Schedule to the Income Tax Act 58 of 1962. When you sell or dispose of an asset at a profit, a portion of that gain is added to your taxable income and taxed at your marginal income tax rate. Budget 2026 introduced the most significant CGT threshold changes since 2012.
CGT is not a separate tax. It is part of South Africa's income tax system. When you dispose of an asset at a profit, a portion of that capital gain is included in your taxable income and taxed at your normal marginal income tax rate.
Part of income taxYou do not register separately for CGT. You declare capital gains and losses on your annual income tax return (ITR12).
Only the gain is taxed — not the full proceedsIf you buy an asset for R500,000 and sell it for R800,000, CGT applies to the R300,000 gain (less base costs and exclusions) — not R800,000.
Pre-1 October 2001 gains are excludedCGT was introduced in South Africa on 1 October 2001. Capital gains and losses on assets acquired before that date are only recognised from the "valuation date" of 1 October 2001.
What triggers a disposal?
Events that trigger CGT include: a sale, donation, exchange, loss, death, and emigration (deemed disposal).
Capital gains tax rates for 2026/2027
Capital gains are included in taxable income at an inclusion rate — only a portion of the gain is added to your income. That taxable capital gain is then taxed at your marginal income tax rate, not a flat CGT rate.
Taxpayer type
Inclusion rate
Maximum effective CGT rate
Individuals & special trusts
40%
18% (40% × max marginal rate of 45%)
Companies
80%
21.6% (80% × corporate rate of 27%)
Other trusts
80%
36% (80% × trust rate of 45%)
Note: The "maximum effective CGT rate" is the highest possible rate — most taxpayers will pay less because their marginal income tax rate is below 45%.
If you are an individual and you make a capital gain of R200,000, only R80,000 (40%) is added to your taxable income. That R80,000 is taxed at your marginal rate — not the full R200,000.
Note on special trusts: A special trust (Type A) — created for a person with a disability or a testamentary trust for minors — is taxed at the same sliding-scale rates as individuals, with the same 40% inclusion rate.
CGT exclusions and exemptions (2026/2027)
Several exclusions reduce or eliminate CGT liability. The most important ones for individuals are listed below. Budget 2026 increased three of these thresholds for the first time since 2012.
R50,000
Increased from R40,000 — Budget 2026
Annual exclusion
Every individual and special trust is entitled to an annual exclusion of R50,000 of net capital gains (or losses) per tax year.
If your total net capital gain for the year is R50,000 or less, you pay no CGT
The exclusion cannot be carried forward — any unused portion is forfeited at year-end
In the year of death, the annual exclusion increases to R440,000 (up from R300,000 — Budget 2026)
R3,000,000
Budget 2026 change (from R2m)
Primary residence exclusion
When you sell the home you ordinarily live in, the first R3,000,000 of any capital gain is excluded.
Applies to natural persons only
Must qualify as your primary residence
Applies to the first 2 hectares of land
If used for business/rental, exclusion is apportioned
Applies to gains only
CGT liability arises when sale agreement signed (not at Deeds Office) — threshold applies to agreements signed on or after 1 March 2026
R2,700,000
Increased from R1.8m — Budget 2026
Small business disposal
Individuals aged 55 or older who dispose of a qualifying small business may exclude up to R2,700,000.
Market value ceiling: R15,000,000 (up from R10m)
Must have been actively involved in business
Specific Eighth Schedule requirements apply
Exempt
Personal-use assets
Capital gains and losses on personal-use assets are generally excluded from CGT.
Motor vehicles (your personal car)
Household furniture and appliances
Personal jewellery (with limitations)
Boats and aircraft (with limitations)
Other notable exclusions:
Compensation received for personal injury or illness
Donations or bequests of assets to an approved public benefit organisation (PBO/Section 18A)
Assets held in a tax-free savings account (TFSA) — gains are completely exempt
Certain land restitution claims
How to calculate capital gains tax — step by step
The 5-step CGT calculation
1
Calculate the capital gain (or loss)Capital gain = Proceeds − Base cost
Proceeds = the amount you receive (or are deemed to receive)
Base cost = what you originally paid, plus allowable costs (legal fees, improvements, agent's commission)
2
Apply the annual exclusionNet capital gain = Capital gain − Annual exclusion (R50,000)
If the result is zero or negative: no CGT is payable.
3
Apply the inclusion rateTaxable capital gain = Net capital gain × Inclusion rate (40%)
4
Add to taxable income
The taxable capital gain is added to your other income for the year.
5
Tax at your marginal rate
Your total taxable income is taxed using the normal income tax bracket table.
Worked example — sale of a second property
Scenario: An individual under 65 earns R500,000 salary. They sell a second property (not their primary residence) for R2,000,000 that they bought for R1,200,000 in 2015. Base costs including improvements and legal fees: R150,000.
Step
Calculation
Amount
Proceeds
Sale price
R2,000,000
Base cost
Purchase price + improvements + legal
R1,350,000
Capital gain
R2,000,000 − R1,350,000
R650,000
Less annual exclusion
(R50,000)
Net capital gain
R600,000
Inclusion rate (40%)
R600,000 × 40%
R240,000
Added to taxable income
R500,000 salary + R240,000
R740,000
Tax at marginal rate
Marginal rate on R740,000 = 36% bracket
CGT portion taxed at ≈36%
Effective CGT on the gain
36% × 40%
≈14.4% of original R600,000
This example is illustrative. Actual tax depends on all income sources, deductions, and applicable rebates. Use our CGT calculator for an estimate.
Primary residenceGain up to R3,000,000 is excluded (2026/2027)
Second properties / investment propertiesNo primary residence exclusion — full CGT applies after the R50,000 annual exclusion
Mixed-use property (part home, part rental)The exclusion is apportioned based on the portion used as a primary residence
When CGT is triggeredThe date the sale agreement is signed — not the date transfer is registered at the Deeds Office (SARS Budget 2026 FAQ)
Non-residents selling SA propertyA withholding tax applies under Section 35A of the Income Tax Act — the buyer withholds a percentage of the proceeds as an advance payment towards the seller's tax liability
Shares and unit trusts are capital assets subject to CGT when sold
Revenue vs. capital distinctionIf you trade shares frequently for profit, SARS may treat gains as ordinary income (revenue), not capital gains — the tax treatment depends on your intention at time of purchase and your trading pattern
Annual exclusion applies(R50,000 for individuals, 2026/2027)
Tax-free savings accounts (TFSAs)Gains on investments held within a TFSA are completely exempt from CGT
Unit trustsGains on disposal of units in a unit trust are subject to CGT; you may receive an IT3(c) certificate from the fund showing capital gains amounts
CGT on cryptocurrency
SARS Guidance
SARS treats cryptocurrency as an asset for CGT purposes
Gains from disposing of crypto (selling, exchanging, or using crypto to purchase goods/services) may be subject to CGT or income tax, depending on whether SARS views the activity as capital or revenue in nature
Frequent trading is more likely to be treated as revenue (income tax at full marginal rate); long-term holding is more likely to be treated as capital (CGT at inclusion rate)
SARS has stated that crypto gains must be declared on the ITR12 under the relevant income or CGT sections
Voluntary Disclosure Programme (VDP)Taxpayers with undeclared crypto income can regularise via the VDP before SARS initiates an audit
In the year a person dies, all assets are deemed to have been disposed of at market value immediately before death — triggering CGT on any gains
The annual exclusion in the year of death is R440,000 (up from R300,000 — Budget 2026, effective 1 March 2026)
The R3,000,000 primary residence exclusion also applies in the year of death
The deceased estate is a separate taxpayer for the tax year of death and any subsequent years until finalised
CGT on emigration (deemed disposal)
When a South African resident formally ceases tax residency, they are deemed to have disposed of all their worldwide assets at market value on the date of cessation
This triggers CGT on any unrealised gains at that point
Applies to all assets except South African immovable property and permanent establishment assets, which remain within the South African tax net
How to declare capital gains on your ITR12
No separate CGT return exists. Capital gains and losses are declared on your annual income tax return (ITR12) — specifically in the Capital Gains section, which appears once you activate it in the return wizard.
1
Activate the CGT section
On the ITR12 wizard — answer "Yes" when asked if you disposed of any assets during the year
2
Complete the "Disposal of Assets" schedule
For each disposal, record: description of asset, proceeds, base cost, capital gain or loss
3
Offset gains against losses
Net your total gains and losses for the year, then apply the annual exclusion (R50,000 for 2026/2027)
4
The taxable capital gain is automatically added
To your taxable income by eFiling
Documents to retain (do not submit, keep for 5 years):
Sale agreement and transfer documents (property)
Original purchase documents and base cost records
Agent commission invoices
IT3(c) certificates from unit trust funds (if applicable)
There is no single flat CGT rate. For individuals, 40% of the net capital gain is included in taxable income (the "inclusion rate"), and that amount is taxed at your marginal income tax rate. The maximum effective CGT rate for individuals is 18% (40% × the top marginal rate of 45%). Companies pay an effective maximum of 21.6% and non-special trusts 36%.
For the 2026/2027 tax year (1 March 2026 – 28 February 2027), individuals and special trusts have an annual CGT exclusion of R50,000. This was increased from R40,000 by Budget 2026, effective 1 March 2026. If your total net capital gain for the year is R50,000 or less, you pay no CGT.
If the property is your primary residence, the first R3,000,000 of any capital gain is excluded from CGT (increased from R2,000,000 by Budget 2026, effective 1 March 2026). CGT only applies if your gain exceeds this threshold. For investment properties or second homes, the full gain (after the R50,000 annual exclusion) is subject to CGT.
No. Capital gains tax is part of South Africa's normal income tax system. You do not register separately for CGT. Capital gains are declared on your annual ITR12 income tax return, and the taxable capital gain is added to your other income and taxed at your marginal income tax rate.
Yes, generally. When you sell shares, the gain is subject to CGT if SARS views the activity as capital in nature. Frequent share trading may be treated as revenue (ordinary income tax) rather than capital. The R50,000 annual exclusion applies to individuals. Gains on shares held in a tax-free savings account (TFSA) are fully exempt.
Yes. SARS treats cryptocurrency as an asset. Gains from disposing of crypto (selling, exchanging, or spending) are subject to either CGT or income tax depending on whether the activity is capital or revenue in nature. Long-term holding is more likely to be treated as capital; frequent trading as income. All crypto gains must be declared on your ITR12.
When a taxpayer dies, all their assets are deemed disposed of at market value immediately before death, triggering CGT on unrealised gains. The annual exclusion in the year of death is R440,000 (increased from R300,000 by Budget 2026, effective 1 March 2026). The R3,000,000 primary residence exclusion also applies.
The base cost is generally what you paid for the asset, plus allowable costs directly related to acquiring and improving it — such as legal fees, transfer costs, and the cost of improvements (for property). Selling costs such as agent's commission can also reduce the proceeds for CGT purposes. For assets acquired before 1 October 2001, special valuation date rules apply.