Budget 2026: Three major reasons for South African expats to return home

Finance Minister Enoch Godongwana delivered a 2026 Budget Speech on 25 February in Parliament that aims to lure back thousands of skilled expats through tax breaks and investment incentives.

The move could potentially halt the so-called “brain drain” that has seen over one million South African citizens move abroad since 2000. By offering juicy sweeteners for those looking to reinvest in their home soil, there is a clear message: it is time to bring your skills and capital back to South Africa.

As reported in 2024, the number of returnees has been on a declining trend, dropping from 45 866 in 2011 to just 27 983 by 2022.

However, Godongwana noted that South Africa had reached a fiscal “turning point”, marked by its removal from the FATF greylist and its first credit rating upgrade in 16 years.

Three reasons why Budget 2026 is a game-changer for South African expats

1. Tax-free savings and retirement sweeteners

The first major pull factor is the significant increase in the tax-free annual investment limit, which has been hiked from R36 000 to R46 000.

Additionally, the limit for retirement fund deductions has been raised to R430 000, allowing high-income professionals to shield a much larger portion of their wealth from the taxman. These measures are specifically designed to help citizens build generational wealth while supporting local economic investment.

2. Personal income tax relief

For middle-class families worried about the high cost of living, the National Treasury has fully adjusted personal income tax brackets and rebates in line with inflation. This ensures that as salaries grow, returnees are not unfairly pushed into higher tax brackets, a phenomenon known as “bracket creep”.

This fiscal discipline provides much-needed stability for households considering a move back to provinces like the Western Cape or Gauteng.

3. A ‘red-tape’ revolution for entrepreneurs

Returning entrepreneurs will find a much friendlier environment for their micro, small, and medium enterprises (MSMEs). The compulsory VAT registration threshold has more than doubled, increasing from R1 million to R2.3 million.

Additionally, the capital gains tax exemption for selling a small business has been increased to R2.7 million, ensuring that founders can eventually retire with dignity.

Minister of Small Business Development Stella Ndabeni has welcomed these changes, noting they allow entrepreneurs to focus on creating jobs rather than managing complex administrative burdens.

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