South Africa: Taxes and Costs
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Rental income tax is high
Effective Tax Rate on Rental Income |
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| Monthly Income | US$1,500 | US$6,000 | US$12,000 |
| Tax Rate | 7.2% | 15.8% | 20.1% |
| Click here to see a worked example | |||
Source:
Disclaimer |
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INDIVIDUAL TAXATION
Non-residents are taxed only on their South African-sourced income. Married couples are assessed and charged as separate individuals. If the property is considered part of the conjugal estate, income is divided between husband and wife in equal portions.
INCOME TAX
Income realized by non-residents is taxed at progressive rates. The following tax rates apply for the tax year March 2009 – February 2010.
2009-2010 INCOME TAX |
|
| TAXABLE INCOME, ZAR (US$) | TAX RATE |
| Up to 132,000 (US$16,440) | 18% |
| 132,000 – 210,000 (US$26,155) | 25% on band over US$16,440 |
| 210,000 – 290,000 (US$36,119) | 30% on band over US$26,155 |
| 290,000 – 410,000 (US$51,065) | 35% on band over US$36,119 |
| 410,000 – 525,000 (US$62,742) | 38% on band over US$51,065 |
| Over 525,000 (US$65,388) | 40% on all income over US$65,388 |
| Source: Global Property Guide | |
Non-residents are entitled to allowable deductions and rebates as residents. For individuals below 65 years of age, the tax threshold is ZAR54,200 (US$6,751) while the tax rebate is ZAR9,756 (US$1,215). Tax threshold and tax rebates for individuals over 65 years of age are set at ZAR84,200 (US$10,487) and ZAR15,156 (US$1,888), respectively.
RENTAL INCOME
Rental income is taxed at progressive rates. Interest payments, insurance premiums, agent’s commission, and maintenance costs are deducted from the rental income.
CAPITAL GAINS
Non-residents are liable to Capital Gains Tax (CGT) on the disposal of property in South Africa. CGT effective from 1 October 2001 is added to the taxable income, and is subject to the progressive income tax rates.
To compute the gain, acquisition costs, transfer costs, and property improvement costs are deducted from the selling price. A further allowable annual deduction of ZAR15,000 (US$1,868) is subtracted. The taxable gain is 25% of the resulting amount.
The disposal of property is assumed on death or emigration, and triggers the payment of CGT.
PROPERTY TAX
Property Tax
Property tax is imposed by the local government at approximately 0.07% - 0.4% of the market value of the property, depending on its size and location.
South Africa - more data and information
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