Income tax in South Africa
July 06, 2016
INDIVIDUAL TAXATION
Since March 2001, the Republic of South Africa has taxed residents on their worldwide 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.
The tax year is from 01 March of the current year to 28 February of the succeeding year. The tax year 2015-2016 is from 01 March 2015 up to 29 February 2016. The tax year 2016-2017 is from 01 March 2016 up to 29 February 2017.
INCOME TAX
Income is aggregated from all sources and taxed at progressive rates. Taxable income is computed as gross income less deductions and allowances. The following tax rates apply for the tax year March 2012 – February 2013.
INCOME TAX 2016-2017 |
|
| TAXABLE INCOME, ZAR (US$) | TAX RATE |
| Up to 188,000 (US$13,429) | 18% |
| 188,000 – 293,600 (US$20,971) | 26% on band over US$13,429 |
| 293,600 – 406,400 (US$29,029) | 31% on band over US$20,971 |
| 406,400 – 550,100 (US$39,293) | 36% on band over US$29,029 |
| 550,100 – 701,300 (US$50,093) | 39% on band over US$39,293 |
| Over 701,300 (US$50,093) | 41% on all income over US$50,093 |
| Source: Global Property Guide | |
INCOME TAX 2015-2016 |
|
| TAXABLE INCOME, ZAR (US$) | TAX RATE |
| Up to 181,900 (US$12,993) | 18% |
| 181,900 – 284,100 (US$20,293) | 26% on band over US$12,993 |
| 284,100 – 393,200 (US$28,086) | 31% on band over US$20,293 |
| 393,200 – 550,100 (US$39,293) | 36% on band over US$28,086 |
| 550,100 – 701,300 (US$50,093) | 39% on band over US$39,293 |
| Over 701,300 (US$50,093) | 41% on all income over US$50,093 |
| Source: Global Property Guide | |
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
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. A further allowable annual deduction of is subtracted. The annual deduction is ZAR30,000 (US$2,143). The taxable gain is 33.3% of the resulting amount.
The disposal of property is assumed on death or emigration, and triggers the payment of capital gains tax (CGT).
PROPERTY TAXATION
Property Tax
Property tax is imposed by the local government at approximately 0.07% to 0.4% of the market value of the property, depending on its size and location.
CORPORATE TAXATION
INCOME TAX
Income and capital gains earned by companies are subject to corporate income tax at a flat rate of 28%. Income-generating expenses are deductible when calculating taxable income.
CAPITAL GAINS
Capital gains are subject to corporate income tax at a flat rate of 28%. To compute the gain, acquisition costs, transfer costs, and property improvement costs are deducted from the selling price. The taxable gain is 66.6% of the resulting amount.
Comments
Kulsum Davids | October 20, 2011
My lease was up for renewal at the end of September 2011 and I still owe the landlord one months rent in arrears and now due to that he did not renew the Lease agreement and gave 2 months notice to find alternate accommodation. Now at the end of October I still did not find alternate accommodation due tp the fact that there are no Rental properties available. I asked the the landlord to give me time but he refuse. Is he allowed to evict me when I paid him up to date until the end of October 2011?
Regards
Tony | April 25, 2014
You state the following:
* "An exclusion amount applies for capital gains realized from the sale of a primary residence. This exclusion may only be claimed by a permanent resident for one property per year of assessment."
My question is. What about non residence such as a person that retires in South Africa from another country? What would their taxation liabilities be for selling a house they bought to live in?
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