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bkb1956
bkb1956, Enrolled Agent/Real Estate & Corporate Paralegal
Category: Capital Gains and Losses
Satisfied Customers: 3011
Experience:  18+ years of experience as a tax preparer; 25+ years of experience as a real estate and corporate paralegal
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My wife and I have just sold our property for R 4.2m and we

Customer Question

My wife and I have just sold our property for R 4.2m and we wish to know how much the CGT would amount to?
JA: The Accountant will know how to help. Please tell me more, so we can help you best.
Customer: What more do you need to know?
JA: Is there anything else the Accountant should be aware of?
Customer: I don't think so...
Submitted: 1 month ago.
Category: Capital Gains and Losses
Expert:  bkb1956 replied 1 month ago.

Welcome to Just Answer. My name is ***** ***** I will be happy to assist you.

The capital gains tax rate for individuals for 2016 is 13.65% and for 2017 is 16.4%.

You will pay capital gains tax on the DIFFERENCE between what you paid for the property and the sales price. For example, if you purchased the property for R 3.5m and sold it for R 4.2m, you will pay capital gains tax on R 700,000.

However, if the property is your primary residence,

Most primary residences will not be subject to CGT because the first R2 million of any capital gain or loss on the sale is disregarded for CGT purposes. This means that you need to make a capital gain of more than R2 million in order to be subject to CGT. in addition, if the proceeds on disposal of a primary residence do not exceed R2 million, any resulting capital gain must be disregarded (this rule is subject to certain conditions, for example, no part of the residence must have been used for the purposes of trade).

My points of reference are the following:

http://www.sars.gov.za/AllDocs/OpsDocs/Guides/LAPD-CGT-G02%20-%20The%20ABC%20of%20Capital%20Gains%20Tax%20for%20Individuals%20-%20External%20Guide.pdf

http://www.sars.gov.za/Tax-Rates/Income-Tax/Pages/Capital-Gains-Tax-(CGT).aspx

Please let me know if I can assist you further.

Thank you and best regards,

Barb