What Is Capital Gains Tax in South Africa? (2026)
Capital gains tax (CGT) is charged when you sell an asset — shares, property, or cryptocurrency — for more than you paid. In South Africa, 40% of your gain is added to your income and taxed at your marginal rate. The effective maximum CGT rate is 18%. Every individual gets a R40 000 annual exclusion and homeowners get a R2 000 000 primary residence exclusion.
What is capital gains tax in South Africa?
Capital gains tax (CGT) in South Africa is charged when you sell an asset — shares, property, or cryptocurrency — for more than you paid. For individuals, 40% of the gain is included in taxable income and taxed at your marginal rate. The effective maximum rate is 18%. Every individual gets a R40,000 annual exclusion.
✓ Fact-checkedUpdated May 2026Sources: SARS — Capital Gains Tax (sars.gov.za)·National Treasury — February 2026 Budget·Income Tax Act Schedule 8
Key takeaways
- ✓CGT inclusion rate for individuals: 40%. Only this fraction of your gain is added to your taxable income.
- ✓Annual exclusion: R40 000 per person per tax year — the first R40 000 of gain is tax-free.
- ✓Primary residence exclusion: first R2 000 000 of gain on your main home is excluded.
- ✓Effective maximum CGT rate for individuals: 45% × 40% = 18% of the gain. Companies: 80% × 27% = 21.6%.
- ✓Crypto, shares, ETFs, investment property, and business assets are all subject to CGT. Personal-use assets (car, furniture) are excluded.
How CGT is calculated in South Africa
1. Capital gain = Proceeds − Base cost
2. Net gain = Capital gain − Annual exclusion (R40,000)
3. Taxable gain = Net gain × 40% (inclusion rate)
4. CGT owed = Taxable gain × Your marginal income tax rate
Quick example — R100,000 gain, 36% marginal rate
Net gain: R100,000 − R40,000 = R60,000
Taxable gain: R60,000 × 40% = R24,000
CGT owed: R24,000 × 36% = R8,640
Effective rate on original gain: 8.64%. Without the annual exclusion it would be R14,400 (14.4%).
Base cost includes the original purchase price plus qualifying improvement costs (e.g. extensions on property) and certain acquisition costs (transfer duty, legal fees for property). Keep all records of improvements — they reduce your eventual CGT liability.
Effective CGT rates by income tax bracket (individuals)
| Marginal income tax rate | Inclusion rate | Effective CGT rate | CGT on R100k gain* |
|---|---|---|---|
| 18% | 40% | 7.2% | R 4 320 |
| 26% | 40% | 10.4% | R 6 240 |
| 31% | 40% | 12.4% | R 7 440 |
| 36% | 40% | 14.4% | R 8 640 |
| 39% | 40% | 15.6% | R 9 360 |
| 41% | 40% | 16.4% | R 9 840 |
| 45% (top) | 40% | 18.0% | R 10 800 |
*CGT on R100,000 gain after R40,000 annual exclusion. Applies to individuals. Companies: 80% inclusion × 27% tax = 21.6% effective rate.
CGT exclusions and exemptions
Annual exclusion — R40 000
Per individual, per tax year. Resets 1 March. In year of death: R300,000.
Primary residence — R2 000 000
On sale of your main home (max 2 hectares, registered in your name). Must have lived there.
Small business disposal — R1 900 000
On sale of a qualifying business with market value below R10m. Age 55+ requirement.
Personal-use assets
Car, clothing, furniture, art (where not held for investment). No CGT on gain.
Life insurance proceeds
Where the original policy owner is the taxpayer. Third-party policy gains may be taxable.
Retirement fund payouts
Pension, provident, and RA payouts are taxed under the retirement lump sum tables — not CGT.
Bequests (inheritance)
If you receive an asset via inheritance, you get a stepped-up base cost equal to market value at date of death.
Worked examples
JSE shares — small gain
31% marginal rateSold R120,000 of ETF units bought for R40,000
Capital gain
R 80 000
Less exclusion
−R 40 000
Taxable (40%)
R 16 000
CGT owed
R 4 960
Effective rate on full gain: 6.2%
Investment property — large gain
39% marginal rateSold rental property for R2.2m, base cost R1.4m
Capital gain
R 800 000
Less exclusion
−R 40 000
Taxable (40%)
R 304 000
CGT owed
R 118 560
Effective rate on full gain: 14.8%
Primary home — below exclusion
39% marginal rateSold home for R5m bought for R3.5m. Exclusion R2m applies first
Capital gain
R 1 500 000
Less exclusion
−R 1 500 000
Taxable (40%)
R 0
CGT owed
R 0
Effective rate on full gain: 0.0%
Primary home — above exclusion
41% marginal rateSold home for R6m bought for R3.2m. R2m exclusion + R40k annual
Capital gain
R 2 800 000
Less exclusion
−R 2 040 000
Taxable (40%)
R 304 000
CGT owed
R 124 640
Effective rate on full gain: 4.5%
CGT on property in South Africa
Property is one of the most common CGT events in SA. Key rules:
- ▸Primary residence: First R2m of gain excluded. You must have lived in the home as your primary residence. Maximum 2 hectares of land included. If the home is partly rented, the exclusion is apportioned.
- ▸Rental/investment property: No primary residence exclusion. Full gain (less R40,000 annual exclusion) at 40% inclusion. Keep records of improvements — they increase base cost and reduce CGT.
- ▸Base cost includes: Purchase price + transfer duty + conveyancing fees + improvement costs (extensions, structural renovations). Does NOT include maintenance, painting, garden, or repairs.
- ▸Married in community of property (COP): Each spouse owns half. Each can claim their own R40,000 annual exclusion on their half share. Primary residence exclusion applies to the full property (not split).
Calculate your exact CGT liability
Enter your proceeds, base cost, and income to see your exact CGT — including the annual exclusion and inclusion rate calculation.
Open CGT calculator →Frequently asked questions
What is capital gains tax in South Africa?
Capital gains tax (CGT) is a component of South African income tax charged on profits made when you sell or dispose of a capital asset (shares, property, cryptocurrency, etc.) for more than you paid for it. CGT in SA is not a separate tax — the capital gain is included in your taxable income at a specific 'inclusion rate'. For individuals, 40% of the gain is added to your income, and you pay your marginal income tax rate on that portion. The effective maximum CGT rate for individuals is therefore 45% × 40% = 18% of the gain.
What is the CGT inclusion rate in South Africa 2026?
The CGT inclusion rate for 2026/27 is: Individuals — 40% of the gain is included in taxable income. Companies — 80%. Trusts — 80% (same as companies). Special trusts (for disabled beneficiaries) — 40% (same as individuals). The inclusion rates are unchanged for 2026/27, as confirmed by National Treasury in the February 2026 Budget Speech.
What is the annual CGT exclusion?
Every South African individual gets a R40 000 annual exclusion that reduces their capital gain each tax year. This means the first R40 000 of capital gain per year is completely tax-free. The exclusion is per person (not per asset) and resets each tax year. In the year of death, the exclusion is R300 000. Married in community of property (COP): each spouse may claim their R40 000 separately on their half share.
How does the R2m primary residence exclusion work?
When you sell your primary home, the first R2 000 000 of the capital gain is excluded from CGT. If your gain is below R2 000 000, no CGT is payable on the home sale (subject to other eligibility conditions). Above R2 000 000, the excess is further reduced by the R40 000 annual exclusion before the 40% inclusion rate is applied. Requirements: you must have lived in the property as your main home; it must be registered in your name (or a natural person's name); a maximum of 2 hectares of land applies.
Do I pay CGT on cryptocurrency in South Africa?
Yes — SARS taxes crypto gains. Whether it is CGT or ordinary income depends on your trading intent and frequency. If you hold crypto as a long-term investment (you bought and held for gain), SARS treats profits as CGT (40% inclusion, R40,000 annual exclusion applies). If you actively trade crypto frequently, SARS may classify your profits as ordinary income (fully taxable at marginal rate — no inclusion rate discount). The 'predominant purpose' test is key: frequent trading = income; long-term holding = CGT. SARS requires all crypto transactions to be disclosed on your ITR12.
Do I pay CGT on shares and ETFs?
Yes — capital gains on JSE-listed shares and ETFs are subject to CGT when you sell. The R40,000 annual exclusion applies. If you reinvest dividends (via a dividend reinvestment plan or DRIP), each reinvestment creates a new base cost entry. Important: short-term share traders whose primary income is trading may be assessed on ordinary income rates instead of CGT. Long-term investors (hold positions months to years) are clearly CGT territory.
What is excluded from CGT in South Africa?
Main CGT exclusions (SARS): (1) R40 000 annual exclusion per individual. (2) Primary residence — first R2 000 000 of gain. (3) Sale of a small business with a value below R10 million — R1 900 000 exclusion applies. (4) Life insurance policies (where the taxpayer is the original owner). (5) Retirement fund proceeds (not subject to CGT — different tax regime). (6) Personal-use assets (car, clothing, furniture — not investment assets). (7) Bequests received on death (donee gets a 'stepped up' base cost).
When do I need to declare CGT to SARS?
You declare capital gains and losses in your annual tax return (ITR12). For most individuals, CGT is reported under 'Capital Gains/Losses from disposal of assets.' You must report ALL disposals (even where no tax is payable due to the annual exclusion or primary residence exclusion). Keep records of all acquisition costs, improvement costs, and disposal proceeds for every capital asset — SARS can request these at any time. Records should be kept for at least 5 years after the assessment.
Data: Effective 1 March 2026 · SARS — Capital Gains Tax · Income Tax Act Schedule 8 · National Treasury — February 2026 Budget · See methodology
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