If you sell a property which is not your primary residence (i.e you own it and rent it out), you can’t apply the primary residence exclusion to this gain. This means that if your gain is greater than the annual exclusion of R40 000, it will attract capital gains tax.
Let’s look at the same example again but assume now that Paul has never lived in the house that he bought. He rented it to a tenant while he lived in a nearby property with his girlfriend i.e. he bought the house purely as an investment.