In the recent 2026 Budget, Finance Minister Enoch Godongwana announced a significant update to capital gains tax (CGT) rules, increasing the exclusion on primary residences from R2 million to R3 million. This change, effective from March 1, 2026, comes at a time when property values in the False Bay region have seen steady growth, making it a timely relief for many local sellers.

Understanding the Change
The CGT exclusion applies to the profit (capital gain) made when selling your primary home, not the full selling price. Previously capped at R2 million, the new R3 million threshold means more of your gain could be tax-free. For homeowners in our area, where properties have appreciated due to demand for waterfront lifestyles and proximity to Cape Town’s amenities, this adjustment could translate into substantial savings.

This update isn’t just about numbers—it’s about putting more money back into sellers’ pockets. Families upgrading, long-term residents downsizing, or retirees planning their next chapter will all feel the impact.

Real-World Savings in Local Context
Consider these scenarios tailored to typical properties in the False Bay area:

1. A Family Home in a Growing Area
Bought for R1.8 million in 2012, sold in 2026 for R4.5 million.
– Capital gain: R2.7 million.
– Old rules: R700,000 taxable, around R86,800 in CGT.
– New rules: Fully excluded, R0 CGT.
That’s nearly R90,000 extra for your family’s next move—perhaps towards a larger home in the Southern Suburbs.

2. A Long-Term Owner in a Prime Spot
Bought for R2.5 million in 2005, sold in 2026 for R7.8 million (reflecting our area’s premium values).
– Capital gain: R5.3 million.
– Old rules: R3.3 million taxable, about R475,200 in CGT.
– New rules: R2.3 million taxable, roughly R331,200 in CGT.
A saving of R144,000 could make all the difference in securing that retirement villa.

3. A Retiree Downsizing
Bought for R950,000 in 1998, sold in 2026 for R3.9 million.
– Capital gain: R2.95 million.
– Old rules: R950,000 taxable, approximately R98,800 in CGT.
– New rules: Fully excluded, R0 CGT.
Preserving nearly R100,000 more equity is a game-changer for enjoying False Bay’s beaches in retirement.

These examples show how the extra R1 million buffer aligns with rising property values in our region, where homes have benefited from infrastructure improvements and lifestyle appeal.

Market Impacts for Sellers
This tax relief is poised to energize the local property scene:
– Increased Activity: Hesitant sellers may now list, boosting inventory in our area.
– Higher Net Proceeds: More confidence in financial planning, especially in high-growth pockets.
– Better Retirement Planning: Long-time owners retain more for their golden years.
– Enhanced Affordability: Extra equity eases the transition to your next property.

The threshold hadn’t been adjusted since 2012, so this update better reflects current market realities.

Planning Your Sale
When selling, focus on the net figure after costs and taxes. With this change, recalculating could reveal new opportunities. If you’re considering a move in the False Bay region, consult a local expert to maximize your benefits.

At Glendyr Dade Properties, we’re here to guide you through the process. Contact us on Main Road, Muizenberg, for personalized advice on your property journey.