The National Treasury’s 2026 Budget strikes an appropriate balance, placing strong emphasis on a fiscal strategy that promotes inclusive growth, macroeconomic stability, and the long-term sustainability of public finances. Equally importantly, it also delivers meaningful tax relief to consumers.
According to Dr Andrew Golding, chief executive of the Pam Golding Property group, the tax relief measures announced provide welcome support to consumers at a time of sustained cost pressures. Adjustments to personal income tax brackets and rebates to counter bracket creep, together with higher tax-free savings and retirement contribution thresholds, will help protect disposable income and encourage greater long-term financial resilience.
For the residential property market, any improvement in household cash flow is significant. Increased disposable income enhances affordability, supports buyer confidence and strengthens the ability of first-time purchasers to enter the market. In an environment where interest rate stability and competitive lending conditions are already underpinning activity, these measures provide an additional tailwind.
Tax adjustments
The adjustment of personal income tax brackets and rebates to account for bracket creep, together with the increase in the annual tax-free investment limit from R36 000 to R46 000, provides welcome relief to households. The raising of the tax-deductible retirement fund contribution cap from R350 000 to R430 000 per annum further incentivises long-term savings and financial planning.
In addition, increasing the VAT registration threshold for small businesses to R2.3 million will ease administrative pressures on entrepreneurs, while the higher capital gains tax exemption on the sale of a small business by older persons offers further targeted relief.
These measures acknowledge the sustained and rising cost challenges facing South Africans, particularly increasing municipal rates and tariffs for essential services such as water and electricity. From a housing perspective, any improvement in disposable income sends a positive signal to the residential property market. First-time buyers, in particular, continue to demonstrate resilience. According to ooba Home Loans, first-time buyer applications rebounded to 48.2% in January 2026, reversing the December 2025 decline. Coupled with the prospect of further interest rate cuts during 2026 and continued competitive lending by banks, conditions remain supportive of entry-level demand from the country’s younger demographic.
The allocation of performance-linked reform funding for metro trading services in electricity, water, sanitation and solid waste is especially encouraging. In the interim, however, homeowners and buyers are proactively continuing to invest in energy- and water-efficient features, which not only mitigate service disruptions but also enhance property appeal and marketability.
Escalating electricity costs have reignited demand for solar installations, while water supply constraints in certain municipalities have heightened the appeal of water-saving technologies and alternative water sources. A sustained focus on infrastructure upgrades and the resolution of service delivery challenges in affected metros would materially strengthen housing demand - including investment activity - in those regions.
Ultimately, the housing sector is likely to be influenced more by macroeconomic stability and municipal performance than by direct fiscal intervention, with selective growth in municipalities demonstrating measurable improvements in service delivery. With the market already in recovery, particularly in the lower and upper price bands, we anticipate that the 2026 Budget will also help stimulate increased activity within the mid-market segment.
On the downside, the increases in the general fuel levy (9 cents per litre for petrol and 8 cents for diesel), the carbon fuel levy (5 cents and 6 cents respectively), and the Road Accident Fund levy (7 cents per litre) are disappointing, as these adjustments will add to inflationary pressures across the broader economy.
On the whole, however, this is an encouraging 2026 Budget, acknowledging the need for meaningful infrastructural improvements and encouraging investment and greater private sector participation.
While broader economic and municipal performance will remain key determinants of housing market momentum, the Budget’s tax relief initiatives send a constructive signal that should help sustain demand, particularly in the entry-level and mid-market segments.
Stability and cost containment welcomed, but property relief wanting
Samuel Seeff, chairman of the Seeff Property Group, says that Finance Minister Enoch Godongwane’s 2026 Budget is mostly good news under the circumstances.
The news that the country’s finances and debt are stabilising, and Treasury is working towards reducing the debt and monthly interest payments that drain the fiscus and detract from service delivery is certainly welcome news.
Seeff also welcomes the higher economic growth outlook of 1.6% (from 1.4% in 2025), but says it must be acknowledged that it is still too low for any meaningful growth and vital job creation. Fiscal relief and reforms must remain a priority.
Relief to consumers in the form of the adjustment of personal income tax brackets and medical tax credits for inflation is welcomed, as is the increase in the tax-free savings limit to R46,000 and retirement contributions to R430,000.
The fact that there is no VAT increase for consumers is also good news while lifting the VAT registration threshold to R2.3 million is welcome news for small businesses. The vital R1 trillion infrastructure investment, focus on public service reforms, and Phase 2 of Operation Vulindlela which includes further reforms is also welcome news for the economy.
Good news for the property sector includes increasing the primary residence CGT exclusion to R3 million (from R2 million), especially since it was last adjusted in 2012. Disappointingly, the minister missed the opportunity to increase the transfer duty exemption threshold (which remains unchanged at R1.21 million). This could have boosted transaction volumes, giving the economy a much-needed boost and increasing government revenue.
We also note the formal announcement of the lower inflation target of 3% (with a 1 percentage point tolerance band) aimed at bringing the interest rate down. Seeff reiterates that the higher than necessary interest rate remains a key factor for the property sector, and an impediment to the market's recovery back to 2021/2 volumes.
The current rate of 6.75% (prime at 10.25%) remains too high given the significant improvement in inflation and the value of the Rand. If these indicators remain stable, Seeff says there is no reason to keep the rate so high. The property sector would like to see further rate cuts in March and May, which are vital both to enable more first-time buyers to get into their own homes and to unlock more spending in the economy.
Nonetheless, Seeff says the property market has entered a positive phase for both buyers and sellers, and the Group would like to see it continue to build momentum. The favourable mortgage lending climate remains a positive support for the market, and buyers should take advantage of the opportunities.
A Budget that believes in us: Geffen welcomes Godongwana’s pro-private sector encore
Finance Minister Enoch Godongwana delivered a 2026 budget speech that was notable not for what it took from South Africans, but for what it gave back. In a surprise shift the Minister withdrew a proposed R20 billion tax hike and instead offered a suite of incentives aimed squarely at empowering private citizens and fixing the broken municipal services that underpin the economy.
Yael Geffen, CEO of Lew Geffen Sotheby's International Realty, described the budget as a watershed moment for the private sector and ordinary homeowners.
“This wasn’t just a budget; it was an acknowledgment that the engine of this country is its people and its businesses,” said Geffen. “For years, we’ve felt the squeeze. Today, Minister Godongwana effectively said, ‘We see you, and we are going to stop making it harder.’ By withdrawing that massive tax hike and adjusting brackets for inflation, he has put money back into the pockets of households at a time when they need it most.”
A municipal shake-up that could reshape the property market
One of the headlines for the property sector was a radical intervention in local government. Godongwana announced a major reform for metro trading services, allocating R27.7 billion over the medium term to a performance-linked grant for electricity, water, and sanitation.
“It’s a stark warning to badly-run councils because the Minister pointed to Johannesburg as a case study of failure, noting that while the city collects R11.9 billion in water revenue, only R1.3 billion is reinvested into Joburg Water, creating a massive R64 billion maintenance backlog.”
Under the new system, revenue collected for services must be reinvested into those same services, and failure to meet reform targets will result in direct budget cuts. Geffen emphasised that this move addresses the single biggest driver of South Africa's current property migration patterns.
“Let’s be blunt: one of the biggest reasons for the flood of semigration to the Western Cape is simple – the municipalities there work. The lights stay on, and the taps run,” she said.
“If this reform succeeds in fixing infrastructure and accountability in places like Johannesburg and eThekwini, it will have a massively positive knock-on effect on the national property market.
“People don't want to flee; they want to live where their assets are secure and their quality of life is high. If we can make municipal services work across the country, we won't just retain residents; we'll revitalise entire local economies.”
Encouraging savings and rewarding enterprise
The Minister also took direct aim at South Africa’s low savings rate. To encourage citizens to build generational wealth, the annual investment limit for tax-free savings accounts was raised from R36,000 to R46,000. Furthermore, the deduction limit for retirement fund contributions was increased from R350,000 to R430,000, allowing individuals to shelter more of their income for the future.
“These are smart, targeted moves,” Geffen noted. “Encouraging people to save – and to save more – is exactly how you build a resilient economy. It’s a vote of confidence in our collective future.”
For entrepreneurs and small business owners – the lifeblood of the property sector – there were further wins. The compulsory VAT registration threshold was more than doubled from R1 million to R2.3 million, providing massive relief for small enterprises struggling with administrative burdens. Additionally, the capital gains tax exemption for older persons (55+) selling a small business was raised from R1.8 million to R2.7 million, making it easier for founders to retire with dignity.
Geffen also noted the significance of what was not in the speech. “There was no increase in property transfer duties, no change to the corporate tax rate, and no new shocks for businesses. In an environment of high costs and uncertainty, that stability is itself a gift.”
A turning point, not a finish line
The Minister framed his speech against a backdrop of macroeconomic recovery. He noted that for the first time in 17 years, debt will stabilise and begin to fall, the budget deficit has narrowed significantly, and debt-service costs are easing. He highlighted South Africa’s removal from the FATF grey list and the first credit rating upgrade in 16 years as signals of “restored credibility” and “renewed resilience”.
Geffen acknowledged these hard-won gains but struck a note of cautious optimism.
“Make no mistake, we are not out of the woods yet. The global environment is uncertain, logistics bottlenecks remain, and we’ve seen the devastation that foot-and-mouth disease can wreak,” she said. “But for a country that has been defined by crisis for so long, a budget that focuses on enabling the private sector and fixing the basics feels like a breath of fresh air.
“Minister Godongwana came to the podium today with the weight of the world on his shoulders, and he delivered a speech that was surprisingly, refreshingly positive for those of us who work in the real economy,” Geffen concluded. “For that, Enoch deserves an encore.”
Budget Speech: Pivotal
Fritz Swanepoel, CEO of Leapfrog Property Group, says this year’s Budget Speech was a pivotal one, particularly following the constructive tone set during the recent State of the Nation Address. Policy alignment and fiscal discipline matter - because confidence drives capital, and capital drives property activity.
For the real estate sector, economic growth remains the single most important catalyst for homeownership. We welcome the continued emphasis on fiscal consolidation and the stabilisation of South Africa’s debt-to-GDP trajectory. These are essential precursors to sustained interest rate relief.
With the repo rate currently at 6.75%, the market is positioned for a gradual easing cycle that could materially improve affordability and unlock pent-up demand - particularly in the R900,000 to R2 million price bands where transactional activity is most sensitive to rate movement.
Encouragingly, the Budget’s continued allocation toward infrastructure investment and energy reform signals recognition that economic growth cannot occur without reliable service delivery. Property values are directly linked to municipal performance, infrastructure reliability and energy security - this is non-negotiable for long-term market stability. We’re also encouraged by the withdrawal of the R20 billion in tax increases that was provisionally included in the May 2025 Budget. Efforts to increase affordability - as an increase in disposable income does - always bodes well for the property sector.
However, growth remains constrained by execution risk. Capital allocation must translate into visible improvement in municipal services, logistics corridors and power stability if we are to see sustained investor confidence.
While no adjustments to transfer duty were introduced - and none were realistically expected given fiscal pressures - any future review of thresholds would meaningfully stimulate first-time buyer activity and liquidity in the lower and middle segments of the market.
A thriving property market operates in a virtuous cycle: political stability supports investor confidence; confidence lowers borrowing costs; lower borrowing costs expand access to homeownership. That cycle is within reach - but delivery now matters more than direction.
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