South Africa Budget 2026/27: What It Really Means for Your Wealth

South Africa’s 2026/27 Budget was delivered on 25 February 2026 by Finance Minister Enoch Godongwana, at a critical moment for the country’s economic outlook.

With government debt pressures rising, infrastructure investment accelerating, and growth still constrained, the National Treasury has opted for a carefully balanced approach: limited direct tax increases, but meaningful structural adjustments affecting investors, business owners and internationally mobile individuals.

Unlike previous years, this Budget avoids dramatic headline tax hikes. Instead, it introduces a series of technical changes that quietly reshape how South Africans save, invest and move capital globally.

For high-net-worth individuals, expatriates, entrepreneurs and globally diversified investors, the message is clear: strategic financial planning matters more than ever.

Here’s what the 2026/27 South African Budget really means for you and your money.

Personal income tax adjusted — but pressure remains

One of the headline announcements is that personal income tax brackets have been adjusted broadly in line with inflation (3.4%), preventing immediate bracket creep for many taxpayers.

The updated tax bands now range from:

• 18% on income up to R245,100

• Up to 45% on income above R1.87 million

While this protects middle-income earners in the short term, South Africa still maintains one of the highest marginal personal tax rates among emerging markets.

For professionals earning foreign income or considering relocation, overall tax residency planning remains critical — particularly given South Africa’s worldwide taxation system.

Capital gains and property relief expanded

Encouragingly, government introduced several investor-friendly adjustments.

Capital gains tax inclusion rates remain unchanged, meaning maximum effective CGT rates stay at:

• 18% for individuals

• 21.6% for companies

• 36% for trusts

However, important exemptions have increased:

• Annual CGT exclusion rises to R50,000

• Primary residence exclusion increases to R3 million

• Small business disposal exemption rises to R2.7 million

For entrepreneurs planning exits or succession strategies, this creates improved opportunities for structured business sales and retirement planning.

Retirement and tax-free investing receive a boost

In contrast to many global budgets focused on restriction, South Africa has expanded incentives for long-term saving.

Key changes include:

• Retirement contribution deductions capped at R430,000, up from R350,000

• Tax-free investment contribution limit increased to R46,000 per year

This reinforces government policy encouraging private retirement provision amid long-term fiscal pressure on public finances.

For globally mobile South Africans and expats, tax-efficient retirement wrappers remain one of the most powerful planning tools available.

Property market thresholds increased

Transfer duty brackets have been increased by 10%, reducing transaction tax exposure for many buyers.

Properties below R1.21 million remain transfer-duty free.

This adjustment offers modest relief to:

• First-time buyers

• Returning expatriates

• Investors repositioning property portfolios

However, rising financing costs and economic uncertainty continue to shape real estate decisions more than tax policy alone.

Corporate tax stable — global rules incoming

Corporate income tax remains unchanged at 27%, providing welcome certainty for businesses.

More significantly, South Africa will implement updated global minimum tax rules, aimed at limiting multinational profit shifting.

For internationally structured companies, this signals tighter alignment with OECD global tax standards and increased reporting scrutiny in future years.

VAT unchanged — but small business relief expanded

The VAT rate remains at 15%, avoiding additional consumer pressure.

However, an important structural change sees the compulsory VAT registration threshold rise from:

R1 million → R2.3 million turnover

This substantially reduces compliance burdens for smaller businesses and entrepreneurs, improving early-stage business cash flow.

Foreign investment flexibility increases

One of the most notable developments for wealthy individuals is the expansion of offshore flexibility.

The single discretionary foreign allowance doubles from:

R1 million → R2 million per calendar year

For investors diversifying internationally, this materially improves the ability to:

• Externalise capital legally

• Build offshore portfolios

• Hedge against rand volatility

Cross-border diversification continues to be a central theme of South African wealth planning.

Fuel levies and indirect taxes edge higher

While income taxes remain relatively stable, indirect taxation increases continue.

The Budget introduces:

• Higher general fuel levies

• Increased Road Accident Fund levy

• Rising carbon fuel taxes

These increases fall below inflation but still contribute to rising transport and living costs across the economy.

New sectors targeted for future taxation

Government also signalled future revenue sources rather than immediate tax hikes.

Proposals include:

• A 20% national online gambling tax

• Consultation on taxation of collective investment schemes

• Incentives supporting electric and hydrogen vehicle production

These measures highlight Treasury’s longer-term strategy of expanding the tax base rather than sharply raising existing rates.

Estate and wealth transfer planning unchanged — for now

No changes were announced to estate duty rates.

However:

• Individual donations tax exemption rises to R150,000 annually

• Entity donation exemption increases to R20,000

This creates additional flexibility for intergenerational wealth transfers and structured gifting strategies.

What should you do next?

The 2026/27 South African Budget is less about immediate tax shocks and more about gradual structural repositioning.

Key considerations include:

• Reviewing offshore diversification opportunities

• Maximising tax-free investment allowances

• Optimising retirement contributions before limits tighten

• Structuring business exits efficiently under new CGT thresholds

• Planning residency and cross-border tax exposure carefully

• Aligning wealth structures with global tax transparency rules

For expatriates, returning residents and internationally active investors, proactive planning is increasingly essential.

Financial planning with a global perspective

The right financial structure can turn policy changes into opportunity.

Our advisers help clients reduce unnecessary tax exposure, diversify internationally, and build resilient long-term wealth strategies.

Start your financial review with Holborn Africa today.