Capital gains tax on your primary residence: the exclusion explained

When you sell a property for more than its base cost, the profit is generally a capital gain, and a portion of that gain is included in your taxable income for the year. But if the property was your primary residence, South African tax law gives you a specific exclusion before any CGT is calculated.

SARS excludes a set amount of capital gain on the sale of a primary residence — reviewed at each Budget Speech — before the inclusion rate for individuals is applied to whatever remains. If you didn't live in the property for your entire period of ownership (for example, it was rented out for part of that time), the exclusion is apportioned accordingly.

On top of the primary residence exclusion, everyone also gets an annual exclusion that applies to capital gains generally, not just property.

CGT interacts with the rest of your tax return, and the rules differ for trusts, companies, non-residents and land over two hectares. Our capital gains tax calculator gives a simplified estimate for individuals — use it as a starting point, then confirm your position with the listing attorney or a tax practitioner.