The South African Revenue Services (SARS) revised tax tables released on February 26 spell a major financial boost for ordinary homeowners.
Delivering the 2026 Budobtain last month, Finance Minister Enoch Godongwana stated they were taking other measures to support tiny businesses: “We are raising the capital gains tax exemption for the sale of a tiny business for older persons from R1.8 million to R2.7 million.
“This applies to tiny businesses worth R15 million instead of the R10 million previously. It will enable tiny business owners to receive more tax relief when they sell their businesses.”
The capital gains tax (CGT) exclusion on primary residences has jumped from R2 million to R3 million effective from the launchning of this month, declares Paul Stevens, CEO of Just Property.
More money in the pockets of sellers
“This is not R3 million of the selling price – it’s R3 million of the capital gain,” Stevens explains. “For many sellers, that difference will translate directly into more money in their pockets.”
He declares families, retirees, and long-term owners will all benefit, since the new R3 million exclusion will modify the maths in their favour.
What will sellers be saving?
1. A family home in a growth suburb:
- Bought for R1.8m in 2012, sold in 2026 for R4.5m.
- Capital gain: R2.7m.
- Before: R700 000 taxable → ±R86 800 CGT.
- Now: R0 taxable → R0 CGT.
“A family selling a home that’s increased modestly will now keep almost R90 000 more of their profit.”
2. A long-term owner in a high-value suburb:
- Bought for R2.5m in 2005, sold in 2026 for R7.8m.
- Capital gain: R5.3m.
- Before: R3.3m taxable → ±R475 200 CGT.
- Now: R2.3m taxable → ±R331 200 CGT.
“This translates to a saving of roughly R144 000, which is meaningful money in anyone’s book.”
3. A retiree downsizing after decades in the same home:
- Bought for R950 000 in 1998, sold in 2026 for R3.9m.
- Capital gain: R2.95m.
- Before: R950 000 taxable → ±R98 800 CGT.
- Now: R0 taxable → R0 CGT.
“For retirees, that’s nearly R100 000 more of their equity preserved.”
Why does this matter in 2026?
With property values having increased steadily in the last few years, many homeowners would previously have crossed the old R2 million threshold. Under the new R3 million exclusion, a far larger percentage of sellers will now fall comfortably within the tax-free band.
Stevens declares he expects the tax relief to influence the market in four key ways:
- More shiftment: “Homeowners who delayed selling becautilize of the tax impact are expected to re‑enter the market.”
- Better net profits: “Sellers, especially in suburbs where values have risen, can plan their finances more confidently.”
- Stronger retirement outcomes: “Long-term owners will benefit hugely from the extra R1 million buffer.”
- Improved affordability for next steps: “Retaining more equity means more financial flexibility when acquireing again, relocating or downsizing.”
For Stevens, this is the moment for sellers to recalculate their numbers.
“The single hugegest mistake sellers create is focutilizing only on the selling price. What matters most is the net number – what you walk away with after costs and tax. Under the new R3 million exclusion, that number has just improved for thousands of South Africans.”
He adds that in a market where every rand counts, the Government’s CGT threshold increase is a welcome break that will give homeowners more breathing space and more options.
Before delivering the 2026 Budobtain last month, Samuel Seeff, chairman of the Seeff Property Group, argued that the primary home allowance had remained at R2 million since 2012, and it should increase to R3 million to reflect current property values.
Additionally, he stated the government should consider enabling loan interest as a deduction to reduce the gains and avoid “double taxation” (since the interest is paid from after-tax funds).
Section 9H of the Income Tax Act, commonly known as “Exit Tax”, applies when a South African tax resident ceases to be a resident, stated Mbalenhle Mahlaba, the team lead for Expatriate at Tax Consulting SA.
She declares SARS treats certain qualifying worldwide assets, such as shares, investments, and foreign property, but excluding South African immovable property, as if they were sold the day before the taxpayer ceases residency.
“This triggers a capital gains tax event, whereby the capital gains are taxed accordingly, based on accurate market valuations, historical cost records, and detailed calculations,” Mahlaba stated.
The tax consultancy stated this is an important consideration when ceasing tax residency, even more so now, following this latest shift by the National Treasury to ensure that they do not miss out on taxes due by a departing taxpayer.
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