How much is capital gains tax in South Africa in 2025?

You finally sold your property, your shares, or your side hustle asset, and the profit feels good.

But then SARS knocks. Capital gains tax is how they claim their share.

In this guide, we break down exactly how CGT works, how much you’ll owe, and what you can do to shrink that tax bill.

 

How much is capital gains tax in South Africa in 2025/2026?

Capital gains tax in South Africa for the 2025/2026 tax year depends on the taxpayer type. Individuals pay tax on 40% of their capital gains at their marginal tax rate (up to 45%), resulting in a maximum effective rate of 18%. Companies and other trusts are taxed on 80% of the gain, with companies paying an effective CGT rate of 21.6% and other trusts up to 36%.

For example, an individual with a R100,000 gain could pay up to R18,000 in capital gains tax depending on their income bracket.

Here’s a table to sum it up.

 

Capital gains tax rates

Taxpayer type	Inclusion rate	Tax applied to gain	Effective rate (approx.)
Individuals	40%	Marginal tax rate (up to 45%)	Up to 18%
Companies	80%	Corporate tax rate (27%)	21.6%
Trusts	80%	Flat trust rate (45%)	36%
Special trusts	40%	Marginal tax rate	Up to 18%

 

That means the structure has a big influence on the final tax bill.

But that’s not all. Exemptions and exclusions can help reduce the tax burden.

 

 

Key exemptions & exclusions

Several exemptions and exclusions apply to capital gains tax in South Africa. These help to reduce or even eliminate the tax.

These include:

• R40,000 annual exclusion for individuals and special trusts
• R2 million primary residence exclusion, if it were the main home
• Personal-use items like clothes, furniture, or a private car
• Retirement lump sums
• Small business assets up to R1.8 million, if the owner is 55 or older
• Donations to a public benefit organisation (PBO)
• Assets left in a will, in most cases

These exclusions can make a huge difference — sometimes even wiping out your CGT bill entirely.

Good to know, right?

On to the next important question.

 

What triggers capital gains tax?

Capital gains tax is triggered when a capital asset is disposed of. A disposal occurs when you:

• Sell an asset
• Donate an asset
• Exchange or swap assets
• Lose ownership of an asset (e.g. through destruction)
• Emigrate (certain assets are treated as disposed of on the day before tax emigration)

Remember, CGT applies to both gains and losses. Losses can be used to offset future capital gains.

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Now that we know when it kicks in — how do we actually work out what’s owed?

 

How is capital gains tax calculated in South Africa?

Capital gains tax in South Africa is calculated by subtracting the base cost of an asset from the selling price to determine the capital gain. A portion of the gain (40% for individuals, 80% for companies and trusts) is added to your taxable income and taxed at your applicable rate.

Formula:

1. Capital gain = Selling price − Base cost
2. Taxable gain = Capital gain × Inclusion rate
3. CGT payable = Taxable gain × Income tax rate

 

For example, a R1,000,000 sale with a R700,000 base cost results in a R300,000 gain. For an individual, 40% of that (R120,000) is taxed at their marginal rate.

Think of it like this: SARS doesn’t tax the whole profit — just a slice of it. Which varies by how much you earn.

If that’s still confusing. Check out this detailed example.

 

Capital gains tax calculation example

Let’s say you’re an individual who sells a second property (not your primary residence) for R3,000,000.

You originally bought it for R1,800,000, and spent R100,000 on improvements. Plus, remember, your annual exclusion is R40,000.

Here’s the math:

1. Base cost = R1,800,000 + R100,000 = R1,900,000
2. Capital gain = R3,000,000 − R1,900,000 = R1,100,000
3. Less annual exclusion = R1,100,000 − R40,000 = R1,060,000
4. Inclusion rate (individual) = 40%
5. Included in taxable income = R1,060,000 × 40% = R424,000
6. This R424,000 is added to taxable income and taxed at the individual’s marginal rate

 

If your marginal tax rate is 36%, the CGT payable is:

R424,000 × 36% = R152,640

So you would pay R152,640 in capital gains tax on the sale.

Got it? Good. 

Now, let’s look at ways to legally reduce this tax.

 

Ways to minimise capital gains tax

While capital gains tax is unavoidable in many cases, there are legal and practical strategies South Africans can use to reduce their liability:

• Spread disposals across multiple tax years
• Use the R40,000 annual exclusion each year
• Keep receipts to prove base costs and improvements
• Claim capital losses when they occur
• Sell in a low-income year for a lower tax rate
• Use the R2 million exclusion for a primary home
• Consult a professional about using trusts or companies
• Donate to a PBO or plan an estate to reduce CGT

 

CGT might be a fact of life — but overpaying it doesn’t have to be. Why give SARS more than you need to?

In case you’re curious about your marginal tax rate. We added a table below.

 

 

SARS tax tables 2025

Simplified summary of the personal income tax brackets for individuals for the 2025/2026 tax year:

Taxable income (R)	Rates of tax (2025/2026)
0 – 237,100	18% of taxable income
237,101 – 370,500	R42,678 + 26% of the amount above R237,100
370,501 – 512,800	R77,362 + 31% of the amount above R370,500
512,801 – 673,000	R121,475 + 36% of the amount above R512,800
673,001 – 857,900	R181,928 + 39% of the amount above R673,000
857,901 – 1,817,000	R254,258 + 41% of the amount above R857,900
1,817,001 and above	R644,489 + 45% of the amount above R1,817,000

 

This table matters because your CGT rate is tied directly to where you fall on it.

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Final thoughts

There you have it — the ins, outs, and clever workarounds of capital gains tax in South Africa.

Start by tracking your assets, keeping records of every expense, and using those annual exclusions wisely.

CGT can sting, but if you plan ahead, it doesn’t have to. Be proactive, stay informed, and protect your profits.

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