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Property CGT after the R3 million primary-residence change

Sell a property at a profit and SARS takes a share of the gain. How big a share comes down to one question above all others: was it the home you lived in, or an investment? On 1 March 2026 that line moved in sellers' favour.

Updated 15 June 2026 · THL Property Group

Capital gains tax is not a separate tax with its own rate. When you sell a property for more than it cost you, a portion of the gain is added to your taxable income for that year, and you pay your normal income tax rate on that portion. For an individual the portion, called the inclusion rate, is 40%.

So three things drive the bill: the size of the gain, your income, and whether the place was your home. The last one matters most.

How the gain is worked out

Your taxable gain is not simply the sale price minus the purchase price. You subtract more than that first:

• The purchase price, plus the transfer duty and conveyancing fees you paid to buy it.
• Capital improvements such as a new roof or an added room. Repairs and maintenance do not count.
• The estate agent's commission and other selling costs on the way out.

What is left is your capital gain. Two exclusions then cut it down before any tax applies.

The two exclusions, and the R3 million change

Every individual gets an annual exclusion: the first R50,000 of total capital gain in a tax year is free. That figure rose from R40,000 on 1 March 2026.

The large one is the primary-residence exclusion. If the property was your main home, the first R3 million of the gain is excluded outright. That threshold sat at R2 million for years. It rose to R3 million for sales where the agreement became binding on or after 1 March 2026. If your contract was signed before that date, the old R2 million still applies, even if the transfer registers later.

That single change is worth real money. Take a home bought years ago for R1.2 million, with R80,000 in buying costs and R200,000 of improvements, sold for R4.5 million with R150,000 in selling costs. The gain comes to R2,870,000.

Same house, same gain, same seller earning R600,000 a year. The only difference is the date the contract became binding, and it decides between a R125,866 bill and nothing at all. If you are near a sale on a long-held family home and the gain is close to R3 million, the signing date is worth watching.

Investment property gets no shelter

The primary-residence exclusion only covers the home you actually live in. A buy-to-let flat, a holiday house, a second property: none of them qualify, and the tax arrives much sooner.

Say you sell an investment flat with a R750,000 capital gain, and you earn R600,000 a year from your job. After the R50,000 annual exclusion, R700,000 remains. The 40% inclusion adds R280,000 to your taxable income, stacked on top of your salary, and at your marginal rate that comes to about R106,326. Roughly 14% of the gain, gone to SARS, on a property that never had a rand of primary-residence cover.

That is why the home-or-investment question dominates everything else. The very same R750,000 profit is tax-free on your primary residence, where it sits comfortably under R3 million, and costs six figures on a rental.

Two things sellers miss

• Joint ownership helps a lot. A couple who own 50/50 each get their own R3 million exclusion, their own R50,000 annual exclusion, and their own marginal rate. On the family home that often clears the tax entirely.
• The inclusion stacks on your income. A big gain can push part of itself into a higher bracket, so a once-off sale in a year you also took a bonus can cost more than the same sale in a quiet year.

Capital gains tax goes easy on the home you live in and shows no mercy to property you hold for profit. On a primary residence under a R3 million gain there is often nothing to pay. On investment property, plan for the bill before you sell, while you can still time it.

Put your purchase price, improvements and sale figures into the Property Sale CGT calculator to see your own number, for a primary home or an investment, with the R3 million rule applied.

Money Cat is an information tool, not tax or legal advice. Figures use the 2026/27 SARS rules for an individual under 65. Trusts and companies are taxed differently. Confirm your position with a registered tax practitioner or SARS before you rely on it.