- From 1 March 2026, the capital gains tax exclusion on primary residences increased from R2 million to R3 million.
- Practical examples reveal that families, long-term homeowners, and retirees could save between about R90,000 and R144,000 when selling their homes.
- Property experts say the higher exclusion will help more sellers hold onto their hard-earned equity and could encourage greater movement in the housing market.
South Africans selling their primary homes can now keep significantly more of their profit, thanks to the government’s decision to raise the capital gains tax exclusion on primary residences from R2 million to R3 million.
This change, which took effect on 1 March 2026 and was confirmed by the South African Revenue Service, means homeowners can now exclude up to R3 million of the profit they make on selling their main home from capital gains tax.
Paul Stevens, CEO of Just Property, says many homeowners misunderstand how the tax works. “It’s not R3 million of the selling price, it’s R3 million of the capital gain,” he explains. “For many sellers, that difference means more money in their pockets.”
What the new threshold means in practice
The real impact of this higher exclusion comes into focus when you look at what it means for different types of property sales.
Take, for example, a family that bought a home in a growing suburb for R1.8 million in 2012 and sells it in 2026 for R4.5 million. Their capital gain would be R2.7 million. Under the old R2 million exclusion, about R700,000 of that gain would have been taxable, resulting in around R86,800 in capital gains tax. With the new R3 million threshold, the entire gain is covered, so there is no capital gains tax to pay at all.
Or consider a homeowner who bought a property in a high-value suburb for R2.5 million in 2005 and sells it in 2026 for R7.8 million. Their capital gain is R5.3 million. Under the previous threshold, R3.3 million of that gain would have been taxable, resulting in a tax bill of about R475,200. Now, with the new exclusion, only R2.3 million is taxable, and the capital gains tax drops to roughly R331,200. That is a saving of around R144,000, no small amount for any household.
Retirees who have owned their homes for decades can also benefit. Imagine someone who bought a property for R950,000 back in 1998 and sells it in 2026 for R3.9 million. Their gain would be R2.95 million. Previously, about R950,000 of that gain would have been taxable, resulting in roughly R98,800 in capital gains tax. Now, thanks to the higher exclusion, the entire gain is tax-free.
“For retirees, that is nearly R100,000 more of their hard-earned equity preserved,” Stevens says.
Why the increase matters for the property market
Property prices in many South African suburbs have steadily climbed over the past decade. As values rose, more homeowners found themselves exceeding the R2 million capital gains tax exclusion and facing a tax bill when selling their homes.
With the increase to a R3 million exclusion, more homeowners can now sell their primary residence without worrying about capital gains tax.
Stevens believes this change could have a ripple effect in the housing market. Some homeowners who put off selling because of the potential tax bill may now reconsider, while others might feel more confident about their finances when selling or downsizing.
Long-term homeowners and retirees are likely to benefit the most, as they have usually built up the biggest gains over time.
Stevens urges sellers to think about the end result, not just the selling price. “The single biggest mistake sellers make is focusing only on the selling price. What matters most is the net number, the amount you actually walk away with after costs and tax,” he says.
He says the higher capital gains tax exclusion will help many homeowners across the country keep more of their net proceeds.
“In a market where every rand counts, the higher capital gains tax threshold is a welcome relief. It gives homeowners more breathing room and more options for their future.”
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