Tax and SARS knowledge base
Does a non-resident pay CGT when selling South African property?
Does a non-resident pay CGT when selling South African property?
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Direct answer
Yes. SARS states that a non-resident is subject to capital gains tax on the disposal of immovable property situated in South Africa and certain interests connected with that property. A sale can also trigger withholding administration for the non-resident seller. The withholding process is not the same as the final CGT calculation or the seller’s complete South African income-tax position.
Tell the conveyancer about non-resident status as soon as the sale is planned. Waiting until transfer documents are final can make it difficult to establish the facts, prepare an application or reconcile withholding with the eventual tax return.
What this means in practice
The sale file must distinguish three items: sale proceeds, costs that may affect the CGT computation, and withholding or other payments handled during conveyancing. Do not label a withholding amount as final CGT merely because it was retained from the sale proceeds. SARS's withholding guidance explains a separate administrative mechanism, while the taxable capital gain requires its own facts and return treatment.
Build a timeline from acquisition to disposal. Keep the purchase agreement, transfer statement, bond documents, legal costs, proof of improvements, municipal records and sale agreement. Separate routine repairs from capital improvements rather than presenting a single property-maintenance total. A new kitchen, structural work or an extension may need different analysis from ordinary maintenance. Evidence should show what was done, when, by whom and how it was paid.
Non-residence needs factual support too. A seller who ceased South African residence, became resident elsewhere or has a treaty position should keep the residence records relevant to the transaction. Do not ask a conveyancer to decide an overseas residence or treaty issue from a postal address. A residence conclusion can affect the administrative process, but it requires accurate dates and evidence.
Step-by-step
- Tell the conveyancer promptly.
Identify the seller's status, tax number, country of residence and contact details. Ask which evidence is needed for the applicable withholding process.
- Create an acquisition-and-improvement schedule.
List acquisition price, transfer costs, improvements, dates and supporting invoices. Keep source documents, not only a spreadsheet total.
- Preserve sale evidence.
Retain the signed agreement, estate-agent and legal statements, transfer account and proof of all amounts retained or paid.
- Separate the withholding calculation.
Obtain documents explaining any amount withheld, payment reference and SARS correspondence. Do not assume it is the final liability.
- Prepare the current return evidence.
Use current SARS CGT and ITR12 guidance when the relevant return is due. Reconcile any withholding to the assessment process.
- Keep foreign residence records.
Preserve tax-residency certificates, foreign assessments and travel or cessation evidence where they are relevant.
Documents and records to keep
- Purchase and sale agreements, transfer statements and conveyancer correspondence.
- Invoices and payment proof for qualifying acquisition and improvement costs.
- Proof of non-resident status and the seller's SARS tax reference.
- Withholding notices, payment proof and any SARS applications.
- CGT working papers, submitted return and assessment.
Important limits and exceptions
This article does not calculate a capital gain, decide residence, apply a treaty or state a withholding percentage. The result can change with the seller, dates, ownership structure, property use, available base-cost evidence and current law. Primary-residence, trust, company and deceased-estate situations require separate analysis.
Do not use a conveyancing estimate as a substitute for the final tax computation. Likewise, do not omit a sale from the return because a payment was retained at transfer.
Before transfer, give the adviser and conveyancer one consistent factual summary. It should state the seller's tax number, ownership percentage, acquisition date, proposed transfer date, country of residence, contact details and record gaps. Differences between the sale agreement, SARS profile and conveyancing questionnaire should be resolved early. After transfer, save the final conveyancing statement and confirm how every retained amount was allocated. That trail is essential when preparing the return and responding to a later SARS request.
When to get tailored advice
Get advice before signing or before transfer where the property was formerly a home, is co-owned, belongs to a trust or company, has poor base-cost records, or the seller changed tax residence. TaxProof can prepare an indexed evidence file for the adviser and conveyancer.