Typical Taxes and Fees
When buying or selling a house in South Africa, you will incur several taxes and fees. These may include:
- Transfer duty: This is a tax on the purchase price of the property and ranges from 0% to 13%.
- Conveyancing fees: These fees are paid to the conveyancer who handles the transaction. They usually amount to around 1% to 2% of the property’s value.
- Real estate agent fees: If you use a real estate agent to sell or buy a property, you will need to pay their fees, which usually amount to around 5% to 7.5% of the property’s value.
In South Africa, property tax is levied by local municipalities and is based on the value of the property. The tax rate varies depending on the location of the property and can range from 0.5% to 1.5% of the property’s value.
Capital Gains Tax (CGT)
If you sell a property in South Africa, you may be subject to capital gains tax. The tax rate is currently 18% for individuals and 22.4% for companies and trusts, and is applied to the difference between the sale price and the purchase price.
In South Africa, there is no inheritance tax.
If you receive a gift of property in South Africa, you may be subject to donations tax. The tax rate is currently 20% and is applied to the value of the property.
Tax on Property Income
If you rent out your property in South Africa, you will be subject to tax on the rental income. The tax rate ranges from 18% to 45%, depending on the amount of rental income.
If you buy a house in South Africa and use it as your primary residence, you may be eligible for certain tax deductions. These include deductions for mortgage interest, property tax, and insurance premiums. Additionally, if you are a first-time homebuyer and the property’s value is less than R1 million, you may be eligible for a transfer duty exemption.