Tax on property income in South Africa
Effective Tax Rate on Rental Income |
|||
| Monthly Income | US$1,500 | US$6,000 | US$12,000 |
| Tax Rate | 12.80% | 12.92% | 16.97% |
| Click here to see a worked example | |||
Source:
Disclaimer |
|||
INDIVIDUAL TAXATION
Nonresidents are taxed only on their South African-sourced income. Married couples are assessed and charged as separate individuals. If the property is considered part of the conjugal estate, income is divided between husband and wife in equal portions.
The tax year is from 01 March of the current year to 28 February of the succeeding year. The tax year 2019-2020 is from 01 March 2019 up to 28 February 2020. The tax year 2020-2021 is from 01 March 2020 up to 28 February 2021.
INCOME TAX
Income realized by nonresidents is taxed at progressive rates. The following tax rates apply for the tax year March 2012 - February 2013.
INCOME TAX 2018-2019 |
|
| TAXABLE INCOME, ZAR (US$) | TAX RATE |
| Up to 195,850 (US$13,989)Â | 18% |
| 195,850 – 305,850 (US$21,846) | 26% on band over US$13,989 |
| 305,850 – 423,300 (US$30,235) | 31% on band over US$21,846 |
| 423,300 – 555,600 (US$39,686) | 36% on band over US$30,235 |
| 555,600 – 708,310 (US$50,593) | 39% on band over US$39,686 |
| 708,310 – 1,500,000 (US$107,143) | 41% on band over US$50,593 |
| Over 1,500,000 (US$107,143) | 45% on all income over US$107,143 |
| Source: Global Property Guide | |
INCOME TAX 2017-2018 |
|
| TAXABLE INCOME, ZAR (US$) | TAX RATE |
| Up to 189,880 (US$13,563) | 18% |
| 189,880 - 296,540 (US$21,181) | 26% on band over US$13,563 |
| 296,540 - 410,460 (US$29,319) | 31% on band over US$21,181 |
| 410,460 - 555,600 (US$39,686) | 36% on band over US$29,319 |
| 555,600 - 708,310 (US$50,593) | 39% on band over US$39,686 |
| 708,310 - 1,500,000 (US$107,143) | 41% on band over US$50,593 |
| Over 1,500,000 (US$107,143) | 45% on all income over US$107,143 |
| Source: Global Property Guide | |
INCOME TAX 2016-2017 |
|
| TAXABLE INCOME, ZAR (US$) | 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 | |
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 ZAR40,000 (US$2,857). 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).
PROPERTY TAXATION
INCOME TAX
Income and capital gains earned of companies are subject to corporate income tax at a flat rate of 28%. In calculating taxable income, income-generating expenses are deductible from the gross income.
Â