Do you pay capital gains tax when selling a gifted property?

You will have to pay capital gains tax on the property if it has increased in value since you purchased it, as the additional value qualifies as profit, even though you are gifting that profit to someone else.

Gifting a property is subject to different tax rules than bequeathing a property in South Africa. Donations tax may apply when a property is donated. The rate is 20% on cumulative taxable donations up to R30 million, and 25% on any portion above this amount.

Natural persons are entitled to an annual exemption of R150,000 in respect of donations tax. The first R150,000 of the value of the property will therefore be exempt from donations tax and the balance will attract donations tax.