Guide to Property Taxes in South Africa
Tax Rate on Rental Income |
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| Monthly Income | US$1,500 | US$6,000 | US$12,000 |
| Tax Rate | 20.02% | 33.09% | 39.31% |
Nonresidents are taxed only on their South African-sourced income. Married couples are assessed and taxed as separate individuals. If the property is considered part of the conjugal estate, income is divided between husband and wife in equal portions.
The tax year is from 01 March of the current year to 28 February of the succeeding year.
Income Tax
Income realized by nonresidents is taxed at progressive rates. The following tax rates apply for the tax year March 2021 - February 2022:
| Taxable Income (ZAR) | Taxable Income (US$) | Tax Rate |
| Up to 237,100 | Up to $12,673 | 18% |
| 237,101 – 370,500 | $12,673 - $19,804 | 42,678 ZAR + 26% on band over 237,100 ZAR |
| 370,501 – 512,800 | $19,804 - $27,410 | 77,362 ZAR + 31% on band over 370,500 ZAR |
| 512,800 – 673,000 | $27,410 - $35,973 | 121,475 ZAR + 36% on band over 512,800 ZAR |
| 673,001 – 857,900 | $35,973 - $45,856 | 179,147 ZAR + 39% on band over 673,000 ZAR |
| 857,901 – 1,817,000 | $45,856 - $97,121 | 251,258 ZAR + 41% on band over 857,900 ZAR |
| Over 1,817,001 | Over $97,121 | 644,489 ZAR + 45% on band over 1,817,000 ZAR |
Rental Income
Rental income is taxed at progressive rates. Interest payments, insurance premiums, agent’s commission, and maintenance costs are deductible from the rental income.
| Tax Type | Rate |
| Rental Income Tax | 18-45% |
Capital Gains
Capital gains realized from selling real property are subject to income tax at progressive rates. To compute the gain, acquisition costs, transfer costs, and property improvement costs are deducted from the selling price. An allowable annual deduction of ZAR 2,000,000 (US$106,902) is subtracted if it's your primary residence. On a secondary residence the deduction is at ZAR 40,000 (US$2,138). The taxable gain is 40% of the resulting amount.
The disposal of property is assumed on death or emigration and triggers the payment of capital gains tax (CGT).
| Capital Gains Tax | Rate |
| Individuals | 18% (on 40% of gain) |
| Businesses | 21.60% (on 80% of gain) |
| Trusts (and others) | 36% (on 80% of gain) |
Capital gains tax calculation formula = capital gain x 40% inclusion rate x marginal tax rate.
Corporate Taxation
Income and capital gains earned by companies are subject to corporate income tax at a flat rate of 27%. Income-generating expenses are deductible when calculating taxable income.
| Tax Type | Rate |
| Corporate Tax | 27% |
Property Buying and Selling Taxes/Costs
| Tax Type | Rate |
| Property Transfer Tax | 0.00% - 13.00% |
| Agent Fee (Buyer) | - |
| Agent Fee (Seller) | 5.00% - 7.50% |
| Legal Fees | 0.70% - 1.20% |
| Notary Fee | 0.10% |
| Roundtrip Cost | 5.80% - 21.80% |
| Source: Global Property Guide, Deloitte | |
Property Taxation in South Africa
Property tax in South Africa is generally levied by local municipalities on the value of the property. The rate varies depending on the municipality and the type of property (residential, commercial, industrial, etc.). Property taxes are used to fund local services such as water supply, sewage, road maintenance, and other municipal services. The tax rate can range from 0% to 1.5% of the property's assessed value.
For residential properties, the municipality assesses the value of the property and applies the relevant rate. Property owners are billed annually or monthly, depending on the municipality's billing cycle. Commercial and industrial properties may be taxed at higher rates compared to residential properties. Additionally, there may be exemptions or rebates for certain types of properties or owners, such as pensioners or low-income households.