SARS gives South African homeowners a R100,000 gift

SARS has increased the primary residence capital gains tax exclusion from R2 million to R3 million, allowing homeowners to keep anywhere from tens of thousands to well over R100,000 more in profit when selling.

A major tax break announced in the 2026 National Budget means South Africans selling their primary homes will now keep significantly more of their profit.

This change is expected to positively influence both household finances and South Africa’s broader property market.

Effective 1 March, the capital gains tax (CGT) exclusion on primary residences has jumped from R2 million to R3 million.

Confirmed by SARS in its revised tax tables released on 26 February 2026, this is a major financial boost for ordinary homeowners, said Just Property CEO Paul Stevens.

“This is not R3 million of the selling price – it’s R3 million of the capital gain,” Stevens explained. “For many sellers, that difference will translate directly into more money in their pockets.”

Families, retirees, and long-term owners will all benefit, he continues, since the new R3 million exclusion will change the maths in their favour.

To illustrate just how much property owners stand to save, Stevens used three different examples. In the first example, a family home in a growth suburb was bought for R1.8 million in 2012 –

“A family selling a home that’s increased modestly will now keep almost R90,000 more of their profit,” Stevens explained.

Next, he looked at an example of a long-term owner in a high-value suburb who bought their property for R2.5 million in 2005 –

“This translates to a saving of roughly R144,000, which is meaningful money in anyone’s book,” Stevens said.

In his final example, he looked at the capital gains a retiree downsizing after decades in the same home will be paying today:

“For retirees, that’s nearly R100,000 more of their equity preserved,” Stevens pointed out.

Effect on South Africa’s property market

Stevens explained that since property values have increased steadily in the last few years, so 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 said he expects the tax relief to influence the market in four key ways. Firstly, the market is now likely to see more movement.

“Homeowners who delayed selling because of the tax impact are expected to re‑enter the market,” he explained.

Homeowners selling their profits will now see higher net profits. “Sellers, especially in suburbs where values have risen, can plan their finances more confidently,” he said.

Stevens explained that homeowners will also now have stronger retirement outcomes. Long-term owners, in particular, will benefit significantly from the extra R1 million buffer.

Finally, Stevens said the improved affordability for those taking their next steps. Since homeowners retain more equity, they will have more financial flexibility when buying again, relocating, or downsizing.

According to Stevens, this is the moment for sellers to recalculate their numbers, especially since the single biggest mistake sellers make is focusing 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 said.

“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.”