What the February Budget changed for your tax-free savings and allowances

Every February the Budget adjusts the numbers that quietly govern personal wealth: the limits on tax-free accounts, the amount of a capital gain that escapes tax, the cap on retirement deductions. They rarely make the headlines, which go to fuel levies and the deficit. And yet they change how much tax-free room you have for the year ahead. The 2026 Budget moved several of them from 1 March 2026, the start of the 2027 tax year. This is a plain rundown of what changed for personal wrappers and allowances, the seasonal companion to our tax calculators. It is general information, not advice about your own position.

Everything here is South Africa specific, for the 2027 year of assessment, which runs 1 March 2026 to 28 February 2027.[1]

The tax-free savings limit went up

The annual contribution limit on a tax-free savings account rose from R36,000 to R46,000, effective 1 March 2026.[1][2] It is the first increase to the annual limit since the R36,000 figure was set, and it is a meaningful jump: R10,000 a year of extra tax-free room. The lifetime limit is unchanged at R500,000.[2]

If any of your own reference material still says R36,000, it is now a year out of date.

The capital gains exclusion went up

The annual capital gains exclusion rose from R40,000 to R50,000, the first increase since 2017.[1][3] That is the slice of your total net capital gain each year that is ignored before any tax is worked out. Alongside it, the primary residence exclusion rose from R2,000,000 to R3,000,000, so the first R3m of gain on the home you live in is now excluded entirely.[1][3] The capital gains inclusion rate for individuals stayed at 40%, and the maximum effective rate stayed at 18%.[3] The mechanics did not change; the tax-free amounts got bigger.

The retirement deduction cap went up

The cap on the retirement contribution deduction under section 11F rose from R350,000 to R430,000 a year.[1][4] The deduction is still 27.5% of your income, but the ceiling on it is now higher, which matters for higher earners contributing large amounts to retirement funds. If you have seen the R350,000 figure quoted recently, that was the 2026 tax-year number.

The brackets moved, for the first time in a while

For the first time since the 2023/24 year, the Budget adjusted the income tax brackets, rebates and thresholds for inflation, by about 3.4%.[1] When the brackets are left unchanged while salaries rise, people drift into higher brackets without earning more in real terms, which is a quiet tax increase. Adjusting the brackets reverses a little of that. The tax-free threshold, the income below which no tax is due, rose to R99,000 for those under 65.[1] The way the brackets work did not change, only the numbers.

A few others worth noting

The donations tax annual exemption for individuals rose from R100,000 to R150,000.[1] The interest exemption was left unchanged at R23,800 under 65 and R34,500 for 65 and older, so as interest income grows, more of it is taxed.[1] And estate duty was untouched: still 20% up to a R30m dutiable amount and 25% above, with the R3.5m abatement unchanged.[1][5] Knowing what did not change is as useful as knowing what did.

One honest caveat on these figures

There is a technicality worth stating plainly, because accuracy matters more than tidiness on tax. Budget figures are announced in February and applied by SARS from 1 March, but the law that formally enacts them, the annual Rates and Monetary Amounts legislation, is passed later in the year. So these 2027 numbers are announced and in force in practice, but the enabling Bill was still working through the process at the time of writing. In the ordinary course they are ratified as expected. It is simply the reason a careful source describes them as announced and applied rather than finally enacted, and it is why our calculators carry a small note to that effect on the current year.

Why the end of February matters

Because everything resets on 1 March, the weeks around the end of February are the natural moment to take stock of the tax year that is closing and see the new set of figures for the year opening. That is a calendar fact rather than advice to do anything specific. The useful habit is simply to know the current numbers, so that your own records are not quietly a year out of date, which is exactly the drift these annual changes cause.

What to take from it

The 2026 Budget raised the tax-free savings limit to R46,000, the capital gains exclusion to R50,000, the primary residence exclusion to R3,000,000, and the retirement deduction cap to R430,000, and it adjusted the income tax brackets for inflation for the first time in three years. Estate duty and the interest exemption stayed put. All of it took effect on 1 March 2026 for the 2027 tax year. Our calculators already use these figures and let you switch between the current and prior tax year, and we refresh them every year after the February Budget, so the numbers you calculate with stay current.