{"id":853903,"date":"2026-03-22T11:00:00","date_gmt":"2026-03-22T09:00:00","guid":{"rendered":"https:\/\/businesstech.co.za\/news\/?p=853903"},"modified":"2026-03-20T16:49:27","modified_gmt":"2026-03-20T14:49:27","slug":"big-changes-for-foreigners-who-own-property-in-south-africa","status":"publish","type":"post","link":"https:\/\/businesstech.co.za\/news\/property\/853903\/big-changes-for-foreigners-who-own-property-in-south-africa\/","title":{"rendered":"Big changes for foreigners who own property in South Africa"},"content":{"rendered":"\n

The 2026 national budget introduced several tax adjustments that have direct implications for foreign nationals who own property in South Africa.<\/p>\n\n\n\n

This is the feedback from Nicolas Botha, Tax Team Compliance and Processing Manager at Tax Consulting South Africa.<\/p>\n\n\n\n

Botha said the changes affect a range of areas, including rental income thresholds, capital gains tax (CGT) and VAT rules. <\/p>\n\n\n\n

all of which could alter both the tax bill and compliance requirements for overseas investors in the local property market.<\/p>\n\n\n\n

\u201cFrom my perspective, we look at what a foreign national typically generates in South Africa,\u201d said Botha.<\/p>\n\n\n\n

\u201cFor me, the tax brackets being adjusted for inflationary changes for the first time in three years was quite vital.\u201d<\/p>\n\n\n\n

He explained that the adjustment affects the tax-free threshold applicable to rental income earned in South Africa.<\/p>\n\n\n\n

He noted that the law includes a R30,000 threshold for rental income in the filing requirements. As a result, even if a foreign owner\u2019s income does not generate a tax liability, they may still be required to file with the South African Revenue Service.<\/p>\n\n\n\n

Another significant change highlighted in the budget relates to capital gains tax. Botha said the annual CGT exclusion has increased from R40,000 to R50,000.<\/p>\n\n\n\n

He added that the increase provides additional relief when foreign investors dispose of property.<\/p>\n\n\n\n

\u201cWhen we look at it now, you\u2019ve got a tax-free portion of R297,500 on the gain if that\u2019s your only income for the year of assessment,\u201d he explained.<\/p>\n\n\n\n

The budget also raised the primary residence exclusion to R3 million, but Botha warned that this benefit can be complicated for foreign owners to use.<\/p>\n\n\n\n

\u201cBasically, what it means is that if it is seen as your primary residence\u2014the place that you would ordinarily reside in \u2014 you can then exclude the capital gain by R3 million,\u201d he said.<\/p>\n\n\n\n

Tax benefits if you have a partner <\/h2>\n\n\n\n
\"\"<\/a><\/figure>\n\n\n\n

However, this definition is closely linked to South Africa\u2019s tax residency tests, which can create risks for non-residents.<\/p>\n\n\n\n

He added that the distinction between \u201cordinarily reside\u201d and \u201cordinarily resident\u201d can create a complex legal line that requires careful tax planning.<\/p>\n\n\n\n

Another change in the budget is the increase in the VAT registration threshold from R1 million to R2.3 million. <\/p>\n\n\n\n

While this may benefit smaller investors, Botha said it could create disadvantages for wealthier foreign property buyers.<\/p>\n\n\n\n

\u201cFor your ordinary investor that\u2019s buying a house occasionally, you\u2019re not going to get to the R2.3 million threshold, so it\u2019s a very good saving for them,\u201d he said.<\/p>\n\n\n\n

However, higher-value investors may face complications. \u201cForeign nationals tend to have euros and then buy more affluent properties. They might buy a property that is already VAT-registered,\u201d Botha explained.<\/p>\n\n\n\n

\u201cIf they no longer intend to rent it out and perhaps they\u2019re going to use it as a holiday home, they won\u2019t be able to claim back input VAT. That\u2019s where there\u2019s a loss on typically your higher investors.\u201d<\/p>\n\n\n\n

Botha also noted that many foreign property owners hold property jointly with a spouse or partner, which can provide tax benefits.<\/p>\n\n\n\n

\u201cCountries tend to have joint filings for spouses, whereas South Africa works on an individual basis,\u201d he said. <\/p>\n\n\n\n

\u201cBoth would file, which means that income can be split 50\/50 between you and your spouse.\u201d<\/p>\n\n\n\n

This can effectively double certain tax benefits. \u201cIf we look at the rebate threshold, you\u2019ve got R99,000 tax-free, which with a spouse jumps to R198,000 tax-free,\u201d he said. <\/p>\n\n\n\n

\u201cThe capital exclusion would normally be R297,500, which both of you would then get the benefit of.\u201d As a result, Botha said it is often advisable for foreign nationals to hold property jointly.<\/p>\n","protected":false},"excerpt":{"rendered":"

The 2026 national budget introduced several tax adjustments that have direct implications for foreign nationals who own property in South Africa.<\/p>\n","protected":false},"author":92,"featured_media":842771,"comment_status":"open","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[12755],"tags":[853,19922,17897],"class_list":["post-853903","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-property","tag-south-africa","tag-south-african-revenue-service-sars","tag-tax-consultancy-sa"],"_links":{"self":[{"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/posts\/853903","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/users\/92"}],"replies":[{"embeddable":true,"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/comments?post=853903"}],"version-history":[{"count":3,"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/posts\/853903\/revisions"}],"predecessor-version":[{"id":853943,"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/posts\/853903\/revisions\/853943"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/media\/842771"}],"wp:attachment":[{"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/media?parent=853903"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/categories?post=853903"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/tags?post=853903"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}