SARS homeowners: primary residence CGT exclusion rises to 3 million and new offshore property disclosure loom

There’s been some really interesting news for SARS homeowners recently, with big changes that could affect your pocket, whether you’re looking to sell your place or if you own property overseas. The South African Revenue Service has announced a significant boost to the Capital Gains Tax exclusion for primary residences, which means you could keep more money when you sell your home. On the flip side, SARS is also tightening its grip on foreign property ownership, getting ready to see all those offshore assets you might have. Plus, there’s a new boss at the helm of SARS, taking over soon.

Key updates for SARS homeowners

• Primary Residence Capital Gains Tax (CGT) Exclusion Increase: Effective 1 March 2026, the primary residence CGT exclusion has increased from R2 million to R3 million. This change was announced in the 2026 National Budget and confirmed in updated tax tables by the South African Revenue Service (SARS) on 26 February 2026.
• Benefit to Sellers: This increase could save qualifying homeowners up to R180,000 in tax, depending on their marginal capital gains tax rate (e.g., 18% for the top marginal rate).
• Impact on Property Market: Analysts anticipate this tax break may encourage more homeowners to sell, giving them greater financial flexibility for new purchases, relocation, or downsizing.
• International Scrutiny on Foreign Property: South Africa has joined a new global tax agreement, the Multilateral Competent Authority Agreement on the Automatic Exchange of Readily Available Information on Immovable Property (IPI MCAA).
• Data Exchange: From around 2029 or 2030, SARS will automatically receive detailed information about foreign immovable property owned by South African taxpayers in over 20 participating countries. This includes ownership details, acquisitions, disposals, and rental income.
• Affected Assets: This initiative targets holiday villas, investment apartments, and Airbnb properties in countries like Portugal, France, and Spain.
• Importance of Tax Residency: South African tax residents must declare worldwide income and capital gains, including those from foreign properties. Proper tax residency cessation is crucial for expatriates to avoid potential double taxation and SARS scrutiny.
• Tax Compliance for Property Transactions: SARS plays a critical role in property transfers. An updated Tax Clearance Certificate (TCC) or Transfer Duty Receipt is required for both buyers and sellers, and outstanding tax issues can significantly delay transactions.
• New SARS Commissioner: Dr Ngobani Johnstone Makhubu has been appointed as the new Commissioner of SARS, effective 1 May 2026, for a five-year term. He succeeds Edward Kieswetter, whose contract ends on 30 April 2026.
• Makhubu’s Background: Dr Makhubu previously served as SARS Deputy Commissioner: Taxpayer Engagement and Operations since May 2023. He has been involved in SARS’s strategic direction since 2020.

Full summary of recent sars homeowners developments

There’s been a significant shift in the landscape for SARS homeowners in South Africa, bringing both welcome relief for those selling their primary homes and increased scrutiny for those with international property holdings. The biggest news offering a direct financial benefit is the increase in the Capital Gains Tax (CGT) exclusion for primary residences. From 1 March 2026, the tax-free portion on the profit made when selling your main home has jumped from R2 million to a generous R3 million. This change was formally announced in the 2026 National Budget and confirmed by the South African Revenue Service in its revised tax tables released on 26 February 2026. For many homeowners, this isn’t just a small adjustment; it could mean keeping tens or even hundreds of thousands of Rands more in their pockets, as highlighted by property experts like Robyn Kymdell from Foreign Buyer Property Solutions.

This increased exclusion is expected to have a ripple effect on the property market, potentially encouraging more people to sell their homes who might have previously delayed due to the tax implications. It offers greater financial flexibility for families moving, retirees downsizing, or long-term owners looking to capitalise on their property’s increased value. The impact is straightforward: a larger portion of the profit from your home sale will now be exempt from tax, meaning a lower tax bill for many.

However, while local sellers are seeing a tax break, SARS homeowners with property abroad are about to face a new level of transparency. South Africa has officially joined an international drive to exchange information on offshore immovable property. Through the Multilateral Competent Authority Agreement on the Automatic Exchange of Readily Available Information on Immovable Property (IPI MCAA), SARS will soon gain unprecedented visibility into foreign assets. This means that if you own a holiday villa in Portugal, an investment apartment in France, or an Airbnb in Spain, SARS will automatically receive detailed information about these properties from over 20 participating countries. While full implementation of this data exchange is expected around 2029 or 2030, the direction is clear: undeclared foreign properties and any associated rental income or capital gains will be firmly within SARS’s tax net for South African tax residents. For those considering selling property abroad or who are South African tax residents with offshore assets, ensuring full compliance and proper tax residency cessation (if applicable) is now more critical than ever to avoid potential penalties.

Beyond these specific property-related changes, the South African Revenue Service itself is undergoing a leadership transition. Dr Ngobani Johnstone Makhubu has been appointed as the new Commissioner of SARS, effective 1 May 2026, taking over from the widely respected Edward Kieswetter, who concludes his seven-year tenure on 30 April 2026. Dr Makhubu, previously the Deputy Commissioner for Taxpayer Engagement and Operations, brings extensive experience within SARS, having been instrumental in the organisation’s strategic direction since 2020. This appointment signals a continuity in SARS’s efforts to enhance tax compliance and modernise its systems.

It’s also worth remembering that tax compliance is paramount for any property transaction in South Africa. Whether you’re buying or selling, SARS requires a Tax Clearance Certificate or Transfer Duty Receipt before a property transfer can be finalised. Unresolved tax issues can lead to significant delays and complications, potentially even resulting in SARS appointing a conveyancer to recover outstanding taxes from the sale proceeds. Staying on top of your tax affairs is always the best policy to ensure smooth property dealings. For more information on trending topics that might affect your finances, you can always check out StudentPortal.org.za.

Q&A for sars homeowners

• Q: What is the main benefit for homeowners selling their primary residence in South Africa?
  
  A: The main benefit is that, from 1 March 2026, the Capital Gains Tax (CGT) exclusion on the profit from selling a primary residence has increased from R2 million to R3 million. This means a larger portion of your profit will be tax-free.
• Q: When did the new Capital Gains Tax exclusion take effect?
  
  A: The new R3 million Capital Gains Tax exclusion for primary residences became effective on 1 March 2026.
• Q: I own property overseas. Will SARS know about it?
  
  A: Yes, very soon. South Africa has joined an international agreement (IPI MCAA), and from around 2029 or 2030, SARS will automatically receive detailed information about foreign immovable property owned by South African tax residents from over 20 countries. This includes ownership details, acquisitions, disposals, and rental income.
• Q: What happens if I don’t declare my foreign property or income to SARS?
  
  A: If you are a South African tax resident, your worldwide income and capital gains are taxable in South Africa. Failure to declare foreign property, rental income, or capital gains could lead to audits, penalties, and interest once the international data exchange becomes fully operational.
• Q: Who is the new Commissioner of SARS, and when do they start?
  
  A: Dr Ngobani Johnstone Makhubu has been appointed as the new Commissioner of the South African Revenue Service (SARS), with his term beginning on 1 May 2026. He takes over from Edward Kieswetter.
• Q: Can outstanding tax issues affect my ability to buy or sell property in South Africa?
  
  A: Absolutely. SARS plays a crucial role in property transactions. Without a Tax Clearance Certificate or Transfer Duty Receipt, which confirms your tax compliance, the property transfer process can be significantly delayed. SARS can even prevent the transfer from proceeding if tax issues are unresolved.
• Q: Does this new CGT exclusion apply to all properties I own?
  
  A: No, the R3 million Capital Gains Tax exclusion specifically applies to your primary residence – the home you ordinarily live in. Other properties, like investment properties or holiday homes, have different CGT rules and generally qualify for a much smaller exclusion (e.g., R40,000 for other assets).