Taxes in South Africa 2026: Residency, the Exit Charge and a Loophole Just Closed
SOUTH AFRICA · EXPAT GUIDE
Key Facts
- —The day test 91 days this year, 91 in each of the five prior years, and 915 across those five.
- —The start date Residency begins on the first day of the sixth year. It is not applied backwards.
- —The relief Brackets and rebates were fully adjusted for inflation, the first such relief since 2023.
- —The exemption Foreign employment income is exempt to 1.25 million rand, about US$77,400. Frozen since 2020.
- —The exit charge A deemed sale of worldwide assets on departure. Local property is excluded and stays taxable.
- —The catch The spousal gift exemption now applies only where the receiving spouse is resident.
The day counts that make you a taxpayer here are widely quoted and widely misunderstood. Residency does not begin when you arrive, and leaving is the part that costs money.
Tax in South Africa turns on residency, and residency has two tests. The first asks where your real home is, judged on the facts.
The second is a day count and applies only to people who are not ordinarily resident. It has three legs and all three must be met.
You need 91 days in the country in the year under consideration. You also need 91 days in each of the five preceding years, and 915 days across those five in total.
Here is the part most guides get wrong. Someone who meets all three becomes resident from the first day of the sixth year, not retroactively from the first.
Residents are taxed on worldwide income with credit for foreign tax paid. Non-residents are taxed only on income from a local source.
The Rates for This Year
The first bracket runs to 245,100 rand, about US$15,186, at 18 percent. The top rate of 45 percent starts at 1,878,600 rand, roughly US$116,400.
The primary rebate is 17,820 rand, some US$1,104, which puts the tax threshold at 99,000 rand or about US$6,134. People over 65 and over 75 get additional rebates.
Brackets and rebates were fully adjusted for inflation at 3.4 percent in the February 2026 budget. That was the first inflation relief since the 2023 tax year.
A tax increase of 20 billion rand, about US$1.24 billion, that had been pencilled in for this budget was withdrawn. The stated reason was that debt collection targets proved unrealistic.
Working Abroad While Resident Here
A resident who works outside the country can exempt the first 1.25 million rand of that employment income. In dollars that is about US$77,400.
The conditions are strict. You need more than 183 full days outside the country in any twelve-month period.
Within those days there must be one unbroken stretch of more than 60 days. Government employees are excluded from the exemption entirely.
The cap did not change in 2026 and has not moved since March 2020. Six years of currency weakness have eroded it considerably in real terms.
Leaving, and What It Costs
Ceasing to be resident triggers a deemed sale of your worldwide assets at market value. It is charged on the day before residency ends.
Local immovable property is excluded from that deemed sale. It keeps its original cost base and stays inside the local capital gains net permanently.
The old exchange control concept of financial emigration was phased out on 1 March 2021. Confirmation of departure now comes from the revenue service rather than the central bank.
There are three routes out. The facts can show your home is elsewhere, or you can spend 330 continuous days outside the country.
The third is a treaty that makes you resident somewhere else. That needs a tax residence certificate from the other country.
The 330-day route breaks only the day-count test. Someone who is ordinarily resident cannot use it and must prove the facts instead.
Moving money out needs an approval for international transfer. That requires statements of local and foreign assets and liabilities for three years, plus proof of the source of funds.
Cryptocurrency trading statements are on the list of documents the revenue service demands for that approval. That is a concrete requirement, not a rumour.
Two allowances govern the amounts. A discretionary allowance of one million rand a year, about US$61,957, needs no supporting documents.
Above that, a further ten million rand a year is allowed, roughly US$619,600. That one requires tax clearance.
The Loophole Closed in February
This is the change aimed squarely at departing foreigners and it took effect on 25 February 2026. Until then, gifts between spouses were exempt from donations tax without limit.
Couples were staggering their departures. One spouse ceased residency first, and assets were then moved to them free of tax.
The second spouse then left with a much smaller exit charge. The treasury named the arrangement when it announced the change.
The exemption now applies only where the receiving spouse is still resident.
If you are planning a sequenced departure from South Africa, that plan no longer works. Anyone who structured around it should take advice before acting.
Capital Gains and Property
For individuals, 40 percent of a gain is included in income, giving a maximum effective rate of 18 percent. Both figures are unchanged.
Two exclusions rose this year. The annual exclusion went from 40,000 to 50,000 rand, about US$3,098.
The exclusion on a main home went from two to three million rand, roughly US$185,900. Both changes took effect with this budget.
Non-residents remain taxable on gains from local immovable property. When a non-resident sells, the buyer withholds tax on account of that liability.
The withholding rates are 7.5 percent for an individual, 10 percent for a company and 15 percent for a trust. It is provisional and credited against the final bill.
Transfer duty on buying property starts at zero below 1,210,000 rand, about US$74,970, and rises to 13 percent at the top. The rates do not depend on the buyer’s nationality.
The Other Taxes You Will Meet
Value added tax stayed at 15 percent. A proposed rise to 15.5 percent was reversed in April 2025 and then suspended by a court order.
The registration threshold rises sharply from April 2026, from one million to 2.3 million rand or about US$142,500. Many foreign freelancers will fall out of compulsory registration.
Donations tax is 20 percent and the annual exemption rose from 100,000 to 150,000 rand, some US$9,294. That figure had been frozen since 2007.
Dividends tax is 20 percent, often reduced by treaty. Interest paid to non-residents carries a 15 percent withholding tax.
Non-residents are exempt from normal tax on local interest, subject to a day test. They must have spent no more than 183 days in the country in the preceding twelve months.
The withholding tax still applies even where that exemption does. The two are separate charges.
Retirement Money and Treaties
Ceasing residency does not release your retirement annuity. The central bank requires you to have been non-resident for three consecutive years before a lump sum can be paid out.
Retirement fund interests are outside the exit charge. The money is taxed when it comes out rather than when you leave.
The two-pot retirement system has run since September 2024 and was not amended in this budget. Withdrawals from the savings component are taxed at your marginal rate.
Treaties exist with around 80 countries and decide who taxes what when both sides claim you. The published status list shows nothing new in force since October 2024.
That list has not been updated in nearly two years, so treat silence as silence. Check the specific treaty for your own country rather than relying on a count.
Enforcement
Collections crossed two trillion rand for the first time in the year to March 2026, about US$124.5 billion. That was up 8.4 percent.
Outstanding tax debt stood at 646 billion rand, roughly US$40 billion. Collection against it fell short of target, which is why the planned tax increase was dropped.
A new commissioner took office on 1 May 2026. Enforcement posture is therefore a live variable over the next few years.
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Frequently Asked Questions
When do I become a tax resident in South Africa?
Either when your real home is here on the facts, or through the day test. The day test makes you resident from the first day of the sixth year.
What are the day counts?
91 days in the year under consideration, 91 days in each of the five preceding years, and 915 days in aggregate across those five.
Is foreign employment income exempt?
The first 1.25 million rand, about US$77,400, provided you spend more than 183 days abroad including one unbroken stretch above 60 days.
What does leaving cost?
A deemed sale of your worldwide assets at market value, excluding local immovable property, which stays in the local capital gains net.
Can I still gift assets to my spouse tax free?
Only if the receiving spouse is still a resident. That limit took effect on 25 February 2026 and was aimed at staggered departures.
Sources: SARS, National Treasury Budget Review 2026, Income Tax Act 58 of 1962, South African Reserve Bank Financial Surveillance, SARS Guide on the Residence Basis of Taxation.
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