25/02/2026
2026/27 Budget : Key Tax Changes That Affect You
Here’s what the latest South African Budget means for your personal tax and planning:
🧾 1. Income Tax Bracket Relief
Income tax brackets and rebates have been fully adjusted for inflation, which helps protect your take-home pay if your income rises with inflation.
💰 2. Tax-Free Savings Accounts (TFSA) : Higher Contribution Limit
You can now contribute up to R46,000 per year to a tax-free savings account (up from R36,000), and all growth (interest, dividends and capital gains) remains tax-free within the account.
📈 3. Retirement Contributions : Higher Deduction Cap
The annual tax-deductible limit for contributions to retirement funds (e.g., retirement annuities, pension/provident funds) increased from R350,000 to R430,000.
📊 4. VAT Registration Thresholds (for Small Businesses)
* The compulsory VAT registration threshold is now R2.3 million (up from R1 million).
* The voluntary VAT registration threshold is now R120,000 (up from R50,000).
This reduces compliance pressure on smaller businesses.
🛒 5. VAT Rate Remains Unchanged
The standard VAT rate was not increased in this Budget.
Capital Gains Tax : More Tax-Free Allowances
🏡 Primary Residence Exclusion
The capital gain you can exclude when selling your primary home has increased from R2 million to R3 million - meaning more of your profit can be tax-free.
📆 Annual Capital Gain Exclusion
The annual exclusion amount for capital gains has increased from R40,000 to R50,000 - lowering tax on asset disposals like shares or second properties.
Donations Tax : Higher Exemptions
🎁 Annual Donations Exemption (Individuals)
The amount an individual can donate each year without triggering donations tax has increased from R100,000 to R150,000. This means small gifts to family or friends are more likely to be tax-free.
🏢 Exemption for Entities
The donations tax exemption for entities (e.g., companies or trusts) has increased from R10,000 to R20,000.
In Practical Terms for You
✅ Your personal tax burden should be lower due to inflation adjustments.
✅ You can save and invest more tax-efficiently through tax-free accounts and retirement contributions.
✅ Small business owners benefit from higher VAT thresholds.
✅ When selling your home or other assets, more gain can be tax-free.
✅ You can give larger tax-free donations to loved ones without triggering donations tax.
