When Finance Minister Enoch Godongwana stood before Parliament yesterday to deliver the 2026 SA Budget Speech, the nation once again tuned in with anticipation to find out what to expect for government spending and more importantly, whether we’ll all be paying more taxes.
Against a backdrop of economic uncertainty, rising public expectations, and global financial pressures, this year’s budget not only outlines government spending and taxation plans but also signals strategic priorities for growth, social development, and fiscal stability.
In his address, the Minister reflected on how South Africa has reached a pivotal moment in managing its public finances after years of severe strain. Five years ago, the country faced the damaging effects of State Capture, credit rating downgrades to junk status, the economic fall out of the COVID pandemic and the ongoing Russia-Ukraine war, as well as the countries grey listing by the Financial Action Task Force. Growth had stalled, public finances were under pressure, and confidence was low.
Rather than succumb to the crisis, government adopted a reform-driven and disciplined fiscal strategy focused on three priorities: stabilising debt, investing in infrastructure, and improving the quality of public spending.
These efforts have begun to yield measurable results. For the first time in 17 years, national debt is stablising and is projected to decline in the years ahead. The budget deficit has narrowed, debt-service costs are decreasing, South Africa has been removed from the FATF grey list, and the country has secured its first credit rating upgrade in 16 years. Lower borrowing costs have also created room to support growth and development.
The overarching message is clear: consistent structural reform and responsible fiscal management are essential foundations for rebuilding credibility, strengthening resilience, and achieving a more inclusive and prosperous South Africa.
Some of the most notable changes for this year have been increases in limits for tax-free annual investments, an increase in the threshold for compulsory VAT registration, now set at R2.3 million, and raising the capital gains tax exemption for the sale of small business for older persons.
The biggest change which is of relevance to South African’s (especially those selling property) is the increase in the Single Discretionary Allowance (SDA) from R1 million to R2 million per calendar year. This change means that you can now transfer up to R2 million per calendar year out of the country without a tax clearance.
Another big change is to Capital Gains Tax with the limit of a gain or loss on the disposal of a primary residence, now set at R3 million, up from the previous threshold of R2 million.
Below sets out in more detail all the relevant changes and tax rates for the forthcoming year:
INCOME TAX: INDIVIDUALS & TAX
Individuals & Special Trusts
| Taxable Income (R) | Rate of Tax (R) |
| 0 – 245 100 | 18% of taxable income |
| 245 101 – 383 100 | 44 118 + 26% of taxable income above 245 100 |
| 383 101 – 530 200 | 79 998 + 31% of taxable income above 383 100 |
| 530 201 – 695 800 | 125 599 + 36% of taxable income above 530 200 |
| 695 801 – 887 000 | 185 215 + 39% of taxable income above 695 800 |
| 887 001 – 1 878 600 | 259 783 + 41% of taxable income above 887 000 |
| 1 878 601 and above | 666 339 + 45% of taxable income above 1 878 600 |
Trusts other than Special Trusts
| Rate of 45% |
INCOME TAX: COMPANIES, SMALL BUSINESS CORPORATIONS & MICRO BUSINESSES
Companies
| Type | Rate of Tax (R) |
| Companies | 27% of taxable income * |
*for years of assessment ending on any date between 1 April 2026 and 31 March 2027
Small Business Corporations
| Taxable Income (R) | Rate of Tax (R) |
| 0 – 99 000 | 0% of taxable income* |
| 99 001 – 365 000 | 7% of taxable income above 99 000 |
| 365 001 – 550 000 | 18 620 + 21% of taxable income above 365 000* |
| 550 001 and above | 57 470 + 27% of taxable income above 550 000* |
*for years of assessment ending on any date between 1 April 2026 and 31 March 2027
Micro Businesses
| Taxable Turnover (R) | Rate of Tax (R) |
| 0 – 600 000 | 0% of taxable turnover* |
| 600 001 – 950 000 | 1% of taxable turnover above 600 000* |
| 950 001 – 1 400 000 | 3500 + 2% of taxable turnover above 950 000 |
| 1 400 001 and above | 12 500 + 3% of taxable turnover above 1 400 000 |
*for years of assessment ending on any date between 1 April 2026 and 31 March 2027
CAPITAL GAINS TAX
Capital Gains on the disposal of assets are included in taxable income.
| Maximum Effective Rate of Tax | |
| Individuals & Special Trusts | 18% |
| Companies | 21.6% |
| Other Trusts | 36% |
Events that trigger a disposal include a sale, donation, exchange, loss, death or emigration. The following are some of the specific exclusions:
- R3 million gain or loss on the disposal of a primary residence;
- Most personal use assets;
- Retirement benefits;
- Payments in respect of original long-term insurance policies;
- Annual exclusion of R50 000 capital gain or capital loss is granted to Individuals and Special Trusts;
- Small business exclusion of capital gains of R2.7 million for individuals (at least 55 years of age), when a small business with a market value not exceeding R15 million is disposed of, and
- The annual exclusion for individuals is increased to R440 000 in the year of death.
WITHHOLDING TAX
Interest
A final tax at a rate of 15% is imposed on interest from a South African source payable to Non Residents. Interest is exempt if payable by any sphere of the South African Government, a bank, or if the debt is listed on a recognized exchange.
Disposal of Immovable Property
A provisional tax is withheld on behalf of Non Resident sellers of immovable property in South Africa, to be set off against the normal tax liability of the Non Resident.
| Type | Rate of Tax |
| Non Resident Individual | 7.5% |
| Non Resident Company | 10% |
| Non Resident Trust | 15% |
TRANSFER DUTY
Transfer Duty is payable at the rates below on all transactions which are not subject to VAT.
| Value of Property (R) | Rate |
| 0 – 1 210 000 | 0% |
| 1 210 001 – 1 663 800 | 3% of the value above 1 210 000 |
| 1 663 801 – 2 329 300 | 13 614 + 6% of the value above 1 663 800 |
| 2 329 301 – 2 994 800 | 53 544 + 8% of the value above 2 329 300 |
| 2 994 801 – 13 310 000 | 106 784 + 11% of the value above 2 994 800 |
| 13 310 000 and above | 1 241 456 + 13% of the value exceeding 13 310 000 |
For further information and a more detailed breakdown of the Budget you can visit the SARS website.