Good News for Homeowners: Tax-Free Profit on Your Home Jumps to R3 Million

• SARS has raised the capital gains tax exemption on primary homes from R2 million to R3 million, meaning homeowners keep more of their profit when selling
• Families, long-term owners, and retirees could save more, depending on property values
• The change is expected to encourage more homeowners to sell, improve retirement outcomes, and give sellers greater financial flexibility

SOUTH AFRICA — If you’ve been holding off on selling your home, now might be the perfect time. The South African Revenue Service (SARS) has just raised the tax-free capital gains threshold on primary residences.

That means more of the profit from your home sale stays in your pocket, and for many homeowners, that could be a game-changer.

According to IOL, from March 2026, the capital gains tax (CGT) exemption on selling your primary home has increased from R2 million to R3 million, meaning more of your profit is now tax-free.

Read also

"They deserve more money": Effects of new minimum wage on domestic workers leave Mzansi divided

What this means in practice

• Family in a growing suburb: Bought home for R1.8m in 2012, sold for R4.5m in 2026. Old tax: R86 800. New tax: R0. That’s nearly R90 000 extra to keep.
• Long-term owner in high-value area: Bought for R2.5m in 2005, sold for R7.8m. Old tax: R475 200. New tax: R331 200. Saving: R144 000.
• Retiree downsizing: Bought for R950 000 in 1998, sold for R3.9m. Old tax: R98 800. New tax: R0. That’s R100 000 more staying with you.

Why does this matter in 2026?

With property values rising steadily, many homeowners would have crossed the old R2 million threshold. Now, with a R3 million exemption, many more sellers fall within the tax-free band.

Stevens expects the change to impact the market in several ways. Homeowners who delayed selling due to tax considerations may return to the market, while sellers can plan their finances with greater confidence, especially in areas with rising property values.

Read also

"Some don't earn that much": SA woman breaks down 5 digit monthly cost of raising a high schooler

Long-term owners stand to benefit from an extra R1 million buffer, strengthening retirement outcomes, and keeping more equity provides greater flexibility when buying, relocating, or downsizing.

"The biggest mistake sellers make is focusing only on the selling price. What matters most is the net number, what you take home after costs and taxes. With the new R3 million exclusion, that number just got better for thousands of South Africans," said Stevens

Stevens added that this CGT threshold increase gives homeowners more breathing space and options in a market where every rand counts.

Budget 2026: tax change to support households and small businesses

In related news, Finance Minister Enoch Godongwana, during the Budget Speech 2026 on 25 February, said that personal income tax brackets and rebates would be fully adjusted in line with inflation, currently at 3.5%, to prevent bracket creep. He also indicated that the government is proposing additional tax measures to ease financial pressure on households and businesses by ensuring tax tables keep pace with inflation.

Expert weighs in on tax relief

Read also

Cindy Makhathini's new business prices spark backlash: "Why is it so expensive?”

A financial expert weighed in on what the tax relief means for the average South African. In an opinion piece, Professor Elda du Toit, Head of the Department of Financial Management at the University of Pretoria, said Finance Minister Godongwana’s announcement was one of the biggest positives of the budget. She explained that the adjustment ensures taxpayers don’t pay more tax just to keep up with rising living costs, providing much-needed relief at a time when expenses are skyrocketing.

South Africans encouraged to take advantage of TFSAs

Briefly News also reported that South Africans are encouraged to boost their knowledge of TFSAs so they can use them to their advantage in the upcoming tax year.

Data shows that while almost half of its users have opened a TFSA, the average contribution is just R14,171, well below the R36,000 annual limit. That’s R21,829 in potential tax-free growth that’s going unclaimed. Across the country, this adds up to millions of rands in lost savings.

Source: Briefly News