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Capital Gains Tax in 2026: What Hermanus Property Sellers Need to Know

If you’re planning to sell your coastal home in Hermanus in 2026, understanding Capital Gains Tax (CGT) is essential. Whether you’re upgrading, downsizing, or realising your investment, knowing how CGT works can help you avoid unexpected costs and maximise your return.

Hermanus remains one of the Western Cape’s most desirable coastal property markets, attracting both local and international buyers. With strong demand and rising property values, many homeowners are sitting on significant capital gains. Before you list your property, it’s important to understand how these gains are taxed.

 

What Is Capital Gains Tax on Property?

Capital Gains Tax is the tax payable on the profit made when selling a property. The profit is calculated as the difference between your selling price and your base cost.

For homeowners, there is a valuable tax relief available:

Primary Residence Exclusion (2026)

The first R2 million of the capital gain on the sale of your primary residence is excluded from CGT, provided:

  • The property was your main residence
  • The property does not exceed 2 hectares in size

 

How Is CGT Calculated?

Understanding the calculation helps you estimate your potential tax exposure:

  • Capital Gain = Selling Price – Base Cost
  • Taxable Gain = (Capital Gain – R2 million exclusion) × 40%
  • CGT Payable = Taxable Gain × your marginal income tax rate

For individuals, the maximum effective CGT rate is 18%.

 

What Counts as Base Cost?

Your base cost includes more than just the original purchase price. Including all eligible costs can significantly reduce your taxable gain:

  • Purchase price
  • Transfer duty and legal fees
  • Estate agent commission
  • Costs of improvements and renovations (excluding maintenance)

Accurate record-keeping is essential to ensure you claim all allowable expenses.

 

Important Considerations for Sellers

Before selling your Hermanus property, keep the following in mind:

  • You must have lived in the property for it to qualify as a primary residence
  • Certain periods of absence may still qualify under SARS provisions
  • Non-resident sellers are subject to withholding tax:
    • 7.5% for individuals
    • 10% for companies
    • 15% for trusts

 

Why This Matters in Hermanus

Property in Hermanus has shown consistent long-term growth, making it an attractive location for investment and lifestyle buyers alike. As property values increase, so does the likelihood of a higher capital gain when selling.

Understanding CGT allows you to:

  • Accurately assess your net proceeds
  • Structure your sale more effectively
  • Make informed financial decisions

 

Thinking of Selling Your Coastal Home in Hermanus?

Selling your home is one of the most important financial decisions you’ll make. Having the right guidance ensures you maximise your return while navigating the process with confidence.

Contact us for a free no-obligation property assessment of your Hermanus home.

 

Sources and Further Reading

  • SARS – Capital Gains Tax Guide for Individuals