The 2026 Budget Speech, delivered by Minister Godongwana, has brought a sense of stability to the South African property market. With no new property taxes, transfer, or VAT duty introduced, buyers and sellers can now plan their next move with certainty. The new tax relief measures, particularly the increase in the VAT registration threshold for small businesses from R1 million to R2.3 million, are expected to have a positive impact on the market.
For sellers, the increase in the Capital Gains Tax (CGT) exclusion on the sale of a primary residence, from R2 million to R3 million, is a significant benefit. This means that the first R3 million of profit on the sale of a primary residence is now exempt from tax, boosting sellers’ net proceeds and reducing their overall tax liability. As explained on the South African Revenue Service website, this change is aimed at supporting homeowners and encouraging investment in the property market.
Impact on Buyers
Buyers stand to benefit from unchanged and still favourable transfer-duty thresholds, along with a far calmer interest-rate environment than two years ago. The adjustment of personal income tax brackets and other thresholds in line with expected inflation of 3.4% will also help to boost household affordability. According to the Statistics South Africa website, this change will help to reduce the impact of bracket creep, which occurs when salary increases intended to keep pace with inflation push taxpayers into higher tax brackets.
Key Takeaways
- No new property taxes, transfer, or VAT duty introduced
- Increase in CGT exclusion on the sale of a primary residence from R2 million to R3 million
- Adjustment of personal income tax brackets and other thresholds in line with expected inflation
The 2026 Budget has provided a steady and confidence-supporting outcome for the residential property market. While the measures introduced may not supercharge the market overnight, they will aid positive momentum for both buyers and sellers. As the market continues to evolve, it is essential for stakeholders to stay informed and adapt to the changing landscape.
