What It Means for Your Money
The Minister of Finance delivered the 2026/27 National Budget Speech on 25 February 2026. For most South Africans, the headline is this: tax rates have not changed, but thresholds and rebates have been adjusted upward, putting more money back in your pocket through what is effectively inflation-linked relief.
At RockWealth Capital, we have unpacked the numbers that matter most to individuals, investors, business owners, and retirees. Here is everything you need to know.
1. Individual Income Tax: Rates Hold, Thresholds Rise
The good news first: no rate increases. The maximum marginal rate for individuals remains at 45%, now kicking in only when taxable income exceeds R1,878,601 (up from R1,817,001). The lowest band remains at 18% on income up to R245,100 (previously R237,100).
The upward shift in brackets means you keep more of your income before crossing into the next band, which is a meaningful, if quiet, form of tax relief.
Updated Tax Rebates:
| Rebate | 2026/27 | 2025/26 |
|---|---|---|
| Primary (all taxpayers) | R17,820 | R17,235 |
| Secondary (age 65+) | R9,765 | R9,444 |
| Tertiary (age 75+) | R3,249 | R3,145 |
Tax-Free Interest Income remains unchanged at R23,800 (under 65) and R34,500 (65 and older).
Notably, the tax-free savings allowance for approved investments, including collective investment schemes, has been increased to R46,000 per tax year (previously R36,000). This is a significant boost for investors building long-term wealth through compliant vehicles.
2. Individual Tax Thresholds 2026/27
Below these income levels, no tax is payable:
| Age Group | 2026/27 Threshold | 2025/26 Threshold |
|---|---|---|
| Under 65 | R99,000 | R95,750 |
| 65 to 74 | R153,250 | R148,217 |
| 75 and older | R171,300 | R165,689 |
3. Capital Gains Tax (CGT): Meaningful Relief
This is where the 2026 budget delivers some of its most impactful personal wealth changes:
- Annual exclusion for individuals: increased to R50,000 (from R40,000)
- Primary residence exclusion: increased to R3,000,000 (from R2,000,000), a major gain for homeowners
- Exclusion at death: increased to R440,000 (from R300,000)
The effective CGT rates remain at 7.2% to 18% for individuals, 21.6% for companies, and 36% for trusts, though correctly structured trusts can achieve the lower individual beneficiary rate.
The increase in the primary residence exclusion to R3 million is particularly noteworthy for property owners in higher-value markets. This means gains on the sale of your primary home are only subject to CGT on amounts exceeding R3 million.
4. Retirement Funds: Contribution Cap Rises
South Africans saving for retirement receive a boost with the contribution deduction cap increasing to R430,000 per annum (previously R350,000), while the deduction formula remains at 27.5% of the greater of taxable income or remuneration. This applies to all retirement fund types: pension, provident, and retirement annuity funds.
The threshold below which a full fund benefit may be commuted (taken as cash rather than an annuity) has been increased to R360,000 (from R247,500).
The Two-Pot Retirement System, implemented on 1 September 2024, remains in force, allowing members limited annual access to the savings pot component of their retirement fund.
5. Estate Duty and Donations Tax
No changes here, but the structure bears repeating for estate planning purposes:
- Estate duty: 20% on dutiable estates up to R30 million; 25% above R30 million
- Abatement: R3.5 million per person (R7 million combined for a surviving spouse)
- Donations tax annual exemption: The first R150,000 donated per tax year by a natural person remains exempt
- Donations between spouses remain fully exempt
6. Medical Scheme Tax Credits
Monthly contributions to a registered medical scheme attract the following credits:
- R376 per month for the taxpayer and first dependant (previously R364)
- R254 per month for each additional dependant (previously R246)
For taxpayers aged 65 and older, or where the taxpayer or a dependant has a disability, 33.3% of qualifying out-of-pocket medical expenses above the threshold may be claimed as an additional credit.
7. Transfer Duty: No Changes
Property buyers will find the transfer duty schedule unchanged:
| Property Value | Rate |
|---|---|
| Up to R1,210,000 | 0% |
| R1,210,001 to R1,663,800 | 3% |
| R1,663,801 to R2,329,300 | 6% |
| R2,329,301 to R2,994,800 | 8% |
| R2,994,801 to R13,310,000 | 11% |
| Above R13,310,000 | 13% |
8. Companies and Close Corporations
The corporate tax rate remains at 27%. Dividends withholding tax holds at 20%. Tax-exempt entities such as retirement funds retain their exemption upon production of a valid certificate.
9. Trusts
The flat rate for trusts remains at 45%. Distributions made to South African resident beneficiaries within the same tax year are taxed in the beneficiaries’ hands, which remains a key structuring consideration.
10. VAT and Small Business
VAT remains at 15%. In a significant shift for small business owners, the compulsory VAT registration threshold has been raised to R2.3 million turnover per year (from R1 million), effective 1 April 2026. This removes a substantial compliance burden for many small and medium enterprises.
The Turnover Tax regime for micro businesses also sees expanded zero-rate thresholds, with no tax now payable on turnover up to R600,000 (previously R335,000).
11. Foreign Investment Allowances
The offshore investment allowance remains at R10 million per adult per calendar year, with the R1 million single discretionary allowance also unchanged.
12. Voluntary Disclosure Programme (VDP)
Taxpayers with undisclosed local or foreign income can approach SARS through the permanent Voluntary Disclosure Programme to mitigate penalties. For unauthorised foreign assets, the SA Reserve Bank’s regularisation process remains available.
2026/27 National Budget Speech Information courtesy of Tony Davey, Duncan McAllister and Werner Vos of Davey’s Locker for Tony Davey & Associates
RockWealth Capital’s Take
The 2026/27 budget is a fiscally measured one, with no dramatic rate hikes but meaningful threshold relief that benefits individuals at most income levels. The standout changes are the CGT primary residence exclusion rising to R3 million, the R46,000 tax-free savings allowance, and the raised retirement fund contribution cap. For small business owners, the VAT registration threshold increase to R2.3 million is a genuine gain.
Contact RockWealth Capital
As always, the real value lies in how you structure your affairs to take full advantage of the Budget Speech changes. Speak to one of our qualified financial advisers to ensure your portfolio is optimised for the 2026/27 tax year.
Email: info@rockwealth.co.za
Call: +27 (0) 10 599 5959
WhatsApp: +27 10 599 5959
Website: rockwealth.co.za
