Property Capital Gains Tax - Less for More
Staying Classifieds
Property Capital Gains Tax – Less May Be More
Property sellers that are obliged to pay Capital Gains Tax [CGT] should keep CGT in mind when buyers try to negotiate a lower price. It may very well be that sellers, by reducing the purchase price, actually lose less than what they initially thought. Yes, less may be more.
Many sellers may be worried about paying a CGT,
however there is an exclusion of a gain of up to R1 500 000 on a primary
residence. Furthermore, if the total proceeds of the sale of a primary
residence do not exceed R2 million, any capital gain or loss is also
disregarded. This means that any home sold for a capital profit
of that amount or less will not be subject to a CGT.
A primary residence is defined as one used mainly for domestic purposes
that you both own in your personal capacity and live in on a permanent basis.
Inclusive of the land the property is situated on an unconsolidated adjacent
land, the residence must not exceed two hectares.
If the property is in the name of a company, close corporation or trust,
the exclusion will not apply as the owner is then not classified as a natural
person and the property will not be used as a primary residence. The seller
would have to pay the capital gains tax upon registration of the property.
Want our free calculator to help you make the More for Less decision? If you have properties listed at www.stayingclassifieds.co.za then simply visit “Contact Us” on our website’s homepage and send us your advert link and we will send you a copy of our calculator that is sure to help you in making the Less for More decision.
Team: Staying Classifieds