Page 6 - Nexia SAB&T Property and Tax Guide 2024

The inclusion rates are as follows:
PERSON 2023 2024 2025

Natural person and special trust 40% 40% 40%
Company 80% 80% 80%
Trust 80% 80% 80%

PRIMARY RESIDENCE EXCLUSION
When a primary residence is disposed of capital gains up to R2 million is exempt from CGT. The following are the
main provisions relating to primary residences:
◆ The exemption is applicable to natural persons and special trusts.
◆ Only one residence at a time may be a primary residence of a person.
◆ The exemption is applicable if a person merely has an interest in the residence. As a result a share in a share
block company and a usufruct may qualify (subject to further provisions).
◆ If the residence is held by more than one person as a primary residence an apportionment of the R2 million
must be made in relation to their interest.
◆ An apportionment of the profit must be done if the person used the house as a primary residence for only
part of the time it was owned. If a person was absent from the residence for less than 2 years as a result of
the residence being offered for sale and vacated due to the intended acquisition of a new primary residence,
the residence being erected on land acquired, the residence being accidently rendered uninhabitable or the
death of that person, it will not be seen as an absence from the residence.
◆ When the residence is used partially for residential and partially for business purposes an apportionment
must be done.
◆ If a person is absent from his residence for a continuous period of 5 years or less and lets the premises
during this time, the absence will be ignored if the person stayed in the residence for a period of at least one
year before and after the period it was let, no other residence was treated as a primary residence during this
period and the person was absent from the residence due to being absent from South Africa or was employed
or engaged in a business in South Africa at a location more than 250 kilometers from the residence.
◆ Where the residence is more than 2 hectares in size, the exemption only applies to the gain made on the
residence and 2 hectares, provided that the land is used mainly for domestic or private purposes together
with the residence and the land is disposed of at the same time and to the same person who buys the
residence (this land could be unconsolidated and next to the residence to qualify).

WITHHOLDING TAX ON ACQUISITION OF PROPERTY FROM NON-RESIDENT
The purchaser must withhold CGT on the purchase price where assets are purchased from a non-resident except
where the amount payable by the purchaser is less than R2 million. The amount withheld is an advance tax in respect
of the sellers’ liability for CGT. This withholding tax is not a final tax and is merely a prepayment of the expected CGT.
If the purchaser is a resident withholding tax must be paid within 14 days from the date on which the seller was
paid and if the purchaser is a non-resident, within 28 days.
The following withholding tax rates are applicable and are based on the proceeds on disposal:
NON-RESIDENT SELLER 2023 2024 2025

Natural person 7.5% 7.5% 7.5%
Company 10% 10% 10%
Trust 15% 15% 15%

The seller may apply to SARS for a directive in order to reduce the amount to be withheld.

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