Tax-free limit increased to R46,000 per year in South Africa
Finance Minister Enoch Godongwana says that the annual tax-free investment limit has been increased from R36,000 to R46,000.
In his 2026 Budget, the Minister said that gross tax revenue was revised up R21.3 billion for 25/26 compared to the estimate in the 2025 Budget.
Due to this, the government decided to withdraw the R20 billion in tax increases provisionally included in the May 2025 Budget.
This allowed the government to withdraw some of its proposed tax increases without risking fiscal sustainability or economic activity.
The Minister added that the nation’s national savings and investment rate is far below the levels needed to truly create generational wealth and support local investment in the economy.
To counter this, the Minister announced the following tax-free adjustments:
- The tax-free annual investment limit will increase from R36,000 to R46,000.
- The limit to retirement fund deductions is raised from R350,000 to R430,000, allowing individuals to invest more each year on a tax-free basis.
While the annual tax-free investment amount has been increased to R46,000 per year, the R500,000 lifetime limit remains intact.
Old Mutual had called on the government to increase the overall tax-free limit for South Africans to R600,000.”
“Increasing the lifetime limit to R600,000 would also extend the investment horizon, allowing investors to benefit from tax-free growth for longer,” said Lizl Budhram, Head of Advice at Old Mutual Personal Finance.
The annual contribution limits had already adjusted over time, increasing from R30,000 per year to R33,000 in 2019 and R36,000 in 2021.
Loading ...