South Africa Property Tax Guide

Municipal Rates (Property Tax)

• Rates: Levied annually by local municipalities on the market value of immovable property. Rates vary by municipality — typically between 0.5% and 2% of the municipal valuation.
• Valuation: Properties are valued by the municipality every 4-5 years (General Valuation) with annual supplementary valuations for new properties.
• Rebates: Many municipalities offer rebates for pensioners, indigent households, and owners of agricultural property. Residential properties often receive a lower rate than commercial or industrial properties.
• Rates are paid monthly or annually to the municipality and are not deductible for income tax purposes (unless the property is used for business/trade).

Transfer Duty

Transfer duty is payable by the purchaser when acquiring immovable property in South Africa. The rates for 2025/2026 are progressive:

• 0% — on the first ZAR 1,100,000 of property value (exempt threshold)
• 3% — on ZAR 1,100,001 to ZAR 1,512,500
• 6% — on ZAR 1,512,501 to ZAR 2,117,500
• 8% — on ZAR 2,117,501 to ZAR 2,722,500
• 11% — on ZAR 2,722,501 to ZAR 12,100,000
• 13% — on ZAR 12,100,001 and above

Transfer duty is paid to SARS within six months of the date of acquisition. Certain transactions are exempt, including property acquired by a spouse, property acquired as part of a deceased estate by a beneficiary, and VAT-registered vendors purchasing property as trading stock.

VAT on Property

• New commercial property — 15% VAT: The sale of newly constructed commercial property by a VAT-registered vendor is subject to VAT at 15%. The purchaser must be VAT-registered to claim input credits.
• Residential property: The sale of existing residential property is generally exempt from VAT (subject to transfer duty instead). New residential property sold by a developer is subject to VAT at 15%.
• Where VAT applies, transfer duty is not payable (the two are mutually exclusive). VAT-registered vendors selling commercial property as going concerns may qualify for zero-rating.

CGT on Property Sale

• Primary residence exclusion: The first ZAR 2 million of capital gain on the sale of a primary residence is excluded from CGT. This applies to individuals and special trusts.
• Inclusion rate for individuals — 40%: 40% of the net capital gain is included in taxable income, taxed at marginal rates (effective max CGT rate of approximately 18% at the 45% bracket).
• Inclusion rate for companies — 80%: Companies include 80% of the capital gain, resulting in an effective max rate of 21.6%.
• The annual CGT exclusion (ZAR 40,000 per year) also applies to property disposals by individuals.