Property vs Stocks vs Offshore Investment Comparison Calculator
Compare SA property, JSE All Share, S&P 500 in ZAR, REITs, government bonds, and money market side-by-side with after-tax returns, CGT, and TFSA efficiency
R 500 000 invested for 15 years
Ranked by net value after CGT on exit. All returns reinvested. SA tax treatment applied.
| # | Vehicle | Future Value | CGT on Exit | Net After Tax | Ann. Return | Risk | Liquidity |
|---|---|---|---|---|---|---|---|
| 1 | SA Gov Bonds RSA Retail Savings Bonds | R 1 821 241 | — | R 1 821 241 | 9.0% | Low-Medium | Medium |
| 2 | S&P 500 (ZAR) Offshore S&P 500 ETF in ZAR terms (~10% ZAR return) | R 2 424 828 | R 769 931 | R 1 654 897 | 11.1% | Medium-High | High |
| 3 | SA REITs SA Listed Real Estate Investment Trusts | R 2 297 123 | R 718 849 | R 1 578 274 | 10.7% | Medium | High |
| 4 | Money Market High-interest savings or money market account | R 1 479 439 | — | R 1 479 439 | 7.5% | Very Low | Very High |
| 5 | JSE All Share Passive JSE ALSI tracker ETF | R 2 088 624 | R 635 450 | R 1 453 174 | 10.0% | Medium-High | High |
| 6 | SA Property Buy-to-let residential property | R 1 950 661 | R 580 264 | R 1 370 397 | 9.5% | Medium | Low |
Assumes returns reinvested. Historical averages used — past performance does not guarantee future results. SA property: 6% growth + 5% yield − 1.5% costs. JSE ALSI: 8% + 2.5% div. S&P 500 ZAR: 10% + 1.5% div. SA REITs: 3% + 8% dist. Gov Bonds: 9% interest. Money Market: 7.5%.
Comparing Property vs Stocks vs Other SA Investments Returns • Tax • Risk • Liquidity
Why Compare Investment Vehicles?
Many South Africans put all their wealth in residential property — their home and one or two buy-to-let properties. While property provides tangible assets and rental income, it is important to understand how it compares to other investment vehicles on a risk-adjusted, after-tax basis.
This calculator uses long-term SA historical averages: JSE ALSI has returned approximately 11–12% nominal over 20 years, though recent years have been lower at 8–9%. SA residential property has averaged 5–7% nominal capital growth, plus 4–6% rental yield. The rand has depreciated approximately 5–6% per year against the USD historically, boosting offshore returns in ZAR terms.
SA Property vs JSE vs Offshore
The key differences between these vehicles:
- Property: Leveraged (you can use a bond), illiquid, high transaction costs, management-intensive. Can access equity via access bond or refinancing. 6% agent commission + VAT on exit.
- JSE All Share: Liquid, low cost (0.2–0.5% TER for ETFs), diversified, no management required. Dividends subject to 20% withholding tax. TFSA-eligible.
- S&P 500 in ZAR: Currency diversification benefit (rand depreciation adds to ZAR returns), but SARB allowance limits apply (R1M discretionary, R10M capital per year). Subject to US dividends withholding at 15%.
- SA REITs: Property exposure without the illiquidity. High distribution yield (8%+). Distributions taxed as income at marginal rate under Section 25BA.
Tax Treatment Summary
South Africa has several tax considerations across investment vehicles:
- CGT: Individual inclusion rate is 40%, so effective max CGT rate is 40% × 45% = 18%. R40,000 annual exclusion. R2,000,000 primary residence exclusion.
- Dividends (SA shares): 20% Dividends Withholding Tax (DWT) — final tax, not included in personal tax return.
- REIT distributions: Section 25BA — distributions are not subject to DWT; instead taxed as ordinary income at marginal rate in the investor's hands.
- Interest income: R23,800/year exemption (under 65), then taxed at marginal rate.
- TFSA: R36,000/year, R500,000 lifetime — all returns entirely tax-free.
Worked Example — Ntombi Invests R500,000
Ntombi (36% marginal rate) has R500,000 to invest for 15 years. She is comparing SA property, JSE ALSI ETF, and offshore S&P 500.
SA Property: At 6% growth + 5% yield − 1.5% costs = 9.5% net reinvested. After 15 years: ~R1,960,000. CGT on exit approximately R130,000. Net: ~R1,830,000.
JSE ALSI ETF: At 8% growth + 2.5% (after 20% DWT) − 0.5% fees = 10% net. After 15 years: ~R2,090,000. CGT approximately R190,000. Net: ~R1,900,000.
S&P 500 ZAR: At 10% growth + 1.3% (after 15% WHT) − 0.4% fees = 10.9%. After 15 years: ~R2,280,000. Net after CGT: ~R2,060,000 — best performer due to rand depreciation benefit.
Frequently Asked Questions
Is property still a good investment in South Africa in 2026?
Property remains a solid long-term investment in South Africa, particularly in well-located urban areas. However, its advantage over listed equities has narrowed due to high entry costs (transfer duty, conveyancing), exit costs (agent commission), and management demands. The JSE All Share has historically outperformed residential property on a pure return basis, while offering superior liquidity and lower transaction costs. Offshore exposure adds rand hedge benefits.
What is the SARB offshore investment allowance for South Africans?
South African tax residents can invest offshore up to R1,000,000 per year under the Single Discretionary Allowance (no SARS TCS required) and up to R10,000,000 per year under the Capital Allowance (requires a valid SARS Tax Clearance Status). Amounts above R10M require SARB approval. These limits apply to individuals — corporate entities have separate rules.
How are SA REIT distributions taxed?
Under Section 25BA of the Income Tax Act, distributions from SA-listed REITs (qualifying distributions) are not subject to Dividends Withholding Tax (DWT). Instead, they are included in the investor's taxable income and taxed at their marginal income tax rate. This makes REITs less tax-efficient for high-income investors compared to ordinary dividend-paying shares (which benefit from the flat 20% DWT).
Should I maximise my Tax-Free Savings Account before buying more property?
Generally yes. A Tax-Free Savings Account (TFSA) offers completely tax-free returns — no CGT, no dividends tax, no income tax on interest. The R36,000/year limit (R500,000 lifetime) means all returns grow without any tax drag. This is particularly valuable for high-income earners in the 36–45% marginal bracket. Many financial advisors recommend maximising TFSA contributions before additional leveraged property investment.
What is the effective CGT rate on property in South Africa?
For individuals, the CGT inclusion rate is 40% — meaning 40% of the capital gain is included in taxable income. At the maximum marginal rate of 45%, the effective CGT rate is 40% × 45% = 18%. For an investment property, a R40,000 annual exclusion applies. For a primary residence, the first R2,000,000 of gain is excluded. Trusts have a higher inclusion rate of 80% (effective max 36%), and companies 80% inclusion at 27% corporate tax rate.