Budget 2026: How Much Will the Increased CGT Primary Residence Exclusion Save You?

SARS has announced significant updates to Capital Gains Tax (CGT) effective 1 March 2026. These changes represent the first major adjustment to these thresholds since 2012, offering substantial relief to property owners and estates.

Key Policy Changes

The following exclusions have been increased for the 2026 tax year:

• Primary Residence Exclusion: The first portion of net gain excluded from tax has increased from R2 million to R3 million.
• Annual Individual Exclusion: Increased by 25%, rising from R40 000 to R50 000.
• Deceased Estate Exclusion: Increased by 47%, rising from R300 000 to R440 000.

Note: These new rates apply exclusively to property transfers registered and individuals who pass away on or after 1 March 2026.

How Much Will You Save When Selling Your House?

The most significant "win" for homeowners is the R1 million boost to the primary residence exclusion. This means when you sell the home you live in, the first R3 million of your capital gain is now tax-free.

While the Transfer Duty threshold remains unchanged (no duty is payable on properties purchased for R1 210 000 or less), the CGT relief will drastically change the financial outcome for families, retirees, and long-term investors.

Real-World Savings Scenarios

To illustrate the impact, here are three examples of how the new R3 million exclusion changes the math:

1. The Suburban Family Home

• History: Bought for R1,8m in 2012; sold for R4,5m in 2026.
• Total Capital Gain: R2,7m.
• Old Rules: R700,000 was taxable → ±R86 800 CGT.
• New Rules: R0 is taxable → R0 CGT.
• Result: A saving of R86 800.

2. 21 Year Homeowner - R8,5 million Sales Price

• History: Bought for R2,5m in 2005; sold for R8,5m in 2026.
• Total Capital Gain: R6m.
• Old Rules: R3.96m was taxable → ±R712 800 CGT.
• New Rules: R2.95m is taxable → ±R531 000 CGT.
• Result: A saving of R181 800.

3. The Retiree Downsizing

• History: Bought for R950 000 in 1998; sold for R3,9m in 2026.
• Total Capital Gain: R2,95m.
• Old Rules: R950 000 was taxable → ±R98 800 CGT.
• New Rules: R0 is taxable → R0 CGT.
• Result: A saving of R100 000.

Under the new R3 million exclusion, a far larger percentage of sellers will now fall comfortably within the tax-free band - which will lead to more homeowners re-entering the property market, especially those who were previously delaying, due to the tax impact. Sellers will also experience better net profits when selling, which will be especially beneficial to retirees.