ALL FAQs

I enter into a long-term lease for a building which I then use as my primary residence. I then sell this right for a profit of R2 million. Can I claim the primary residence exclusion?
Yes. In order to have a primary residence an individual or special trust must have “an interest” in a residence. The term “an interest” includes, among other things,

Is the primary residence exclusion an unlimited exclusion?
No, certain limits have been placed on the exclusion. •The exclusion will not apply to any capital gain or loss in excess of R1,5 million for the 2007 to 2012 years of assessment.

Does the primary residence exclusion apply to a residence held through a company or trust?
No, because the owner must be an individual or special trust. However, the estate planning, limited liability, or other considerations that led to the property being placed in a company or trust

What happens if I dispose of my primary residence in a joint estate, and I have a capital gain in excess of R1,5 million during the 2012 year of assessment?
The disposal of a primary residence that falls within the joint estate of spouses married in community of property is treated as having been made in equal shares by each spouse and the primary residence exclusion will be apportioned between them.

What happens if I no longer ordinarily reside in my home because I have moved to a new home and am trying to sell the old one?
Generally a person is not entitled to more than one primary residence at the same time. However, you will be treated as having been ordinarily resident in your primary residence if

I work in Johannesburg where I bought a townhouse to stay. My wife and three children still stay in Umtata, my hometown, where I have my main home. Will the sale of my townhouse qualify for the primary residence exclusion when I move back to Umtata?
You will have to choose which of the two residences is to be regarded as your primary residence. If you choose the townhouse then the proceeds from the sale of the townhouse would qualify for the primary residence exclusion.

I am married to three wives in terms of customary law. My wives stay in three different homes that I own. Which home is my primary residence for CGT purposes?
Following the coming into force of the Recognition of Customary Marriages Act, 120 of 1998, on 15 November 2000, each of your wives is recognised as a spouse. You will have to choose which of the three residences is to be regarded as your

If a salaried employee owns a house that he lives in and owns a second property that was let out, is he liable for capital gains tax on the second property which he sold?
The same scenario but assume the taxpayer gives the tenant notice on the second property and then moves into the second property and lives in it. He then advertises the second place for sale.

I bought my primary residence in May 1980 for R98 000. Pre-1 October 2001 improvements =R152 000. Market value on 1 October 2001 = R3 500 000. I sold the property for R4 250 000 on 30 September 2011. Will I be liable for CGT?
There are three possible methods for determining the gain on this property. Market value Proceeds R4 250 000 Less: Market value R3 500 000 Gain R 750 000

A couple has lived on a boat that is longer than 10m for a number of years. The boat is their primary, and indeed only residence. Will they be exempt from CGT if they sell the boat or will SARS seek to tax any gain on disposal?
A boat used as a place of residence by an individual is specifically included in the definition of a “residence”, as is a mobile home and a caravan. A boat will therefore qualify for a

Is the primary residence exclusion of R1,5 million for the 2012 year of assessment subject to apportionment?
The primary residence exclusion is not subject to apportionment when a part of the residence is used for trade purposes or when it is not ordinarily resided in for a part of the period of ownership.

More than 50% of my home is used for business purposes. Do I qualify for the primary residence exclusion?
No. Under the definition of a “primary residence” in paragraph 44 of the Eighth Schedule, a primary residence must be used mainly for domestic purposes. “Mainly” in this context means more than 50%.

What is a primary residence?
A residence must meet certain basic requirements before it can qualify as a primary residence (Paragraph 44 of the Eighth Schedule). :- It must be a structure, including a boat, caravan or mobile home,

Will the sale of my primary home be subject to CGT?
For the 2013 and 2014 years of assessment the first R2 million of capital gain or loss must be disregarded (2007 to 2012: R1,5 million). This concession, known as the primary residence exclusion,

Last Updated: 12/02/2016 12:19 PM     print this page
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