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 | 6.60% | 18.50% | 23.50% |
Nonresident individuals are generally subject to South African income tax on South African-source income, including income derived from real estate situated in South Africa.
Married individuals are generally assessed separately. Specific attribution rules can apply to income derived from assets forming part of a marriage in community of property.
Income Tax
For the 2027 tax year (1 March 2026 to 28 February 2027), individual taxable income is subject to the following progressive rates:
| Taxable Income (ZAR) | Tax Rate |
| Up to 245,100 | 18% |
| 245,101 – 383,100 | ZAR 44,118 + 26% above ZAR 245,100 |
| 383,101 – 530,200 | ZAR 79,998 + 31% above ZAR 383,100 |
| 530,201 – 695,800 | ZAR 125,599 + 36% above ZAR 530,200 |
| 695,801 – 887,000 | ZAR 185,215 + 39% above ZAR 695,800 |
| 887,001 – 1,878,600 | ZAR 259,783 + 41% above ZAR 887,000 |
| Above 1,878,600 | ZAR 666,339 + 45% above ZAR 1,878,600 |
Rental Income
Rental income derived by a nonresident individual from South African real estate is generally taxable in South Africa at the ordinary progressive individual income-tax rates.
Tax is imposed on net taxable rental income, rather than simply on gross rental receipts.
Qualifying expenses incurred in producing rental income can generally be deducted. These can include:
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Interest on a mortgage or other qualifying financing used for the rental property
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Rates and taxes
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Property levies
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Insurance
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Estate-agent or property-management fees
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Repairs and maintenance
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Certain other expenses directly connected with earning rental income
Capital improvements are generally not immediately deductible as ordinary rental expenses.
For a nonresident individual earning rental income from South African real estate, annual gross rental income of $18,000, $72,000 and $144,000 results in estimated annual income tax of approximately $1,181, $13,314 and $33,903, respectively.
The calculation assumes deductible rental expenses equal to 30% of gross rental income, resulting in net taxable rental income of $12,600, $50,400 and $100,800, respectively.
Under these assumptions, income tax represents approximately 6.6%, 18.5% and 23.5% of gross rental income at the three respective income levels.
Capital Gains Tax
Capital gains arising from the disposal of South African immovable property by a nonresident individual are generally subject to South African capital gains tax.
For individuals, 40% of the taxable capital gain is included in ordinary taxable income and taxed at the individual's applicable marginal income-tax rate.
With a maximum individual marginal income-tax rate of 45%, the maximum effective CGT rate is therefore:
40% inclusion × 45% marginal rate = 18% maximum effective CGT
The actual effective CGT rate can be lower where the individual falls within a lower marginal income-tax bracket.
Individuals are generally entitled to an annual capital-gains exclusion of ZAR 40,000.
A separate primary-residence exclusion of up to ZAR 2 million of capital gain can apply where the relevant statutory requirements are satisfied. This should not be confused with the ZAR 40,000 annual CGT exclusion.
The taxable capital gain broadly takes into account the proceeds from disposal less the property's allowable base cost, which can include qualifying acquisition costs, disposal costs and capital improvement expenditure.
For nonresidents, South African CGT generally applies to disposals of South African immovable property and certain interests deriving their value from such property.
Corporate Taxation
South African resident companies and nonresident companies taxable in South Africa are generally subject to corporate income tax at a headline rate of 27%.
Qualifying expenses incurred in producing taxable income can generally be deducted.
Capital gains realized by ordinary companies are subject to an 80% inclusion rate. At the 27% corporate income-tax rate, this produces a maximum effective CGT rate of:
80% × 27% = 21.6%
Qualifying Small Business Corporations can benefit from preferential progressive corporate income-tax rates, subject to requirements concerning ownership, gross income, business activities and other statutory conditions.
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% - 0.50% |
| Costs Paid By Buyer | 0.80% - 14.70% |
| Costs Paid By Seller | 5.00% - 7.50% |
| Roundtrip Cost | 5.80% - 22.20% |
| Source: Global Property Guide, Deloitte, PWC | |
Property Taxation in South Africa
South Africa imposes annual municipal property rates on real estate. These rates are levied by the municipality in which the property is located rather than by the national government.
The tax is generally calculated by applying the municipality's applicable property rate to the property's municipal valuation. Municipalities periodically prepare valuation rolls establishing the taxable value of properties within their jurisdictions.
There is no single nationwide property-tax rate. Each municipality establishes its own rates, and different rates can apply depending on the classification and use of the property, including residential, commercial, industrial and agricultural property.
For an ordinary residential investment property, the annual liability can broadly be expressed as:
Municipal property value × applicable residential property rate = annual property tax
