On 25 February 2026, Finance Minister Enoch Godongwana delivered the National Budget Speech. This year’s budget included several positive developments for investors. The focus remained on encouraging long-term saving and financial security, with a number of tax adjustments that may be beneficial to our clients.
Tax-Free Savings Accounts (TFSA) – Increase to Annual Limit
Tax-Free Savings Accounts remain one of the most effective ways to build long-term wealth because all growth is tax-free. The annual contribution limit for Tax-Free Savings Accounts (TFSAs) has increased from R36 000 to R46 000. The lifetime limit remains R500 000.
Retirement Contributions – Increase to Maximum Contribution Limit
The maximum tax-deductible retirement contribution limit has increased. The deduction limit increases from R350 000 to R430 000 per year. This allows individuals to save more towards retirement while benefiting from tax deductions.
Capital Gains Tax – Increased Exclusions
The annual exclusion increases from R40 000 to R50 000. The exclusion in the year of death increases from R300 000 to R440 000. The primary residence exclusion increases from R2 million to R3 million.
Offshore Investment Allowance Increased
The annual Single Discretionary Allowance has increased from R1 million to R2 million.
Annual Donations
Donations between spouses remain exempt from donations tax, but with a new condition.
From 25 February 2026, the exemption applies only if the receiving spouse is a South African tax resident at the time of the donation. Effective from 1 March 2026, the annual donations tax exemption will increase from R100 000 to R150 000.
As part of the positive direction reflected in the 2026 Budget, there is a clear message that consistent saving and investing remain the most effective ways to build long-term financial security. The increased contribution limits create valuable opportunities to strengthen your financial future. We encourage our clients, where possible, to make full use of the R46 000 annual Tax-Free Savings Account allowance and the available retirement annuity contribution limits to ensure you remain on track toward your financial goals.