Budget 2026/7: Will it unlock property growth?

• Tax relief boosts disposable income and supports property demand.
• Higher VAT threshold eases pressure on SMEs and entrepreneurs.
• Infrastructure reform is positive, execution will determine impact.

A Budget focused on stability and confidence

‍Finance Minister Enoch Godongwana delivered a 2026/7 Budget that prioritises fiscal discipline, tax relief and infrastructure reform over dramatic new spending.

The national balance sheet is improving, debt stabilisation is progressing, and economic growth has been revised upward to 1.6%. While modest, this signals momentum.

For property owners, entrepreneurs and business leaders, the Budget sends a clear message: government is focused on consolidation, investor confidence and structural reform rather than short-term populism.

Key budget highlights

• Withdrawal of R20 billion in previously proposed tax increases.
• Personal income tax brackets and rebates adjusted for inflation.
• VAT registration threshold increased from R1 million to R2.3 million (first adjustment since 2009).
• Capital gains exemption for small business sales increased.
• Tax-free savings limit raised to R46,000 annually.
• Retirement contribution deduction cap increased to R430,000.
• Continued R1 trillion medium-term infrastructure commitment.

The VAT threshold adjustment is particularly significant for SMEs. By lifting compulsory registration to R2.3 million, smaller businesses can grow without the administrative and cash-flow burdens that previously discouraged expansion.

What this means for property and business

‍The property market is deeply linked to disposable income, municipal performance and investor confidence.

Tax relief improves household affordability. Infrastructure reform strengthens property values. SME support encourages job creation and employment fuels housing demand.

However, national fiscal improvement does not automatically translate into improved local service delivery. Municipal mismanagement and infrastructure backlogs remain the largest risk to property value stability.

The Budget’s emphasis on performance-linked allocations and ring-fencing municipal revenue is promising, but delivery now becomes critical.

Industry Perspectives

Stephen Whitcombe, MD: Firzt Realty
Whitcombe believes the renewed focus on local government reform is encouraging for property markets.

Municipalities have been allocated R182 billion this year, with significant funds directed toward infrastructure upgrades and essential services. However, financial mismanagement remains a core concern.

He welcomes reforms requiring municipalities to ring-fence service revenue for infrastructure maintenance, noting that reliable water, electricity and road networks directly influence buyer confidence.

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“If implemented swiftly, these reforms could materially improve property demand and unlock investment,” he says, adding that visible service delivery improvement will be key to restoring trust.

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Stephan Potgieter, CEO: BetterHome Group
Potgieter highlights the withdrawal of R20 billion in tax increases and the inflation-linked bracket adjustments as positive for household affordability.

He notes that while a stronger correction for bracket creep would have been preferable, the measures still increase disposable income and improve homeownership accessibility.

Importantly, the reform of the Municipal Infrastructure Grant and performance-linked allocations could enhance accountability at local level, a critical factor in buyer decisions ahead of local elections.

Dr Andrew Golding, CEO: Pam Golding Properties
Golding views the Budget as balanced and constructive.

Tax relief, improved savings incentives and the higher VAT threshold all support household resilience. With first-time buyer applications rebounding and competitive lending conditions prevailing, these measures provide additional tailwinds.

He stresses that infrastructure performance and municipal execution will ultimately determine housing market momentum.

Increased disposable income strengthens affordability, but long-term confidence depends on reliable services and policy consistency.

Samuel Seeff, Chairman: Seeff Property Group
Seeff welcomes fiscal stabilisation, higher growth projections and infrastructure commitments, but expresses disappointment that no adjustment was made to the transfer duty exemption threshold.

He believes relief for first-time buyers would have stimulated transaction volumes and increased revenue through higher market activity.

Seeff also reiterates that interest rates remain a constraint. With inflation moderating, further rate cuts would significantly boost property recovery and consumer spending.

Nonetheless, he notes the market has entered a positive phase supported by favourable lending conditions.

Berry Everitt, CEO: Chas Everitt International
Everitt emphasises the multiplier effect of tax relief. By leaving more money in the hands of consumers and SMEs, the Budget supports home deposits, property upgrades and buy-to-let investment.

He highlights that every new home built creates up to four additional jobs across related sectors. Increased housing activity therefore amplifies economic growth beyond the property market itself.

While fuel levy increases are disappointing, he believes overall sentiment will remain positive.

Fritz Swanepoel, CEO: Leapfrog Property Group
Swanepoel underscores the importance of policy alignment and fiscal discipline. Confidence drives capital. Capital drives property.

With the repo rate at 6.75%, the possibility of further easing could unlock pent-up demand, particularly in the R900,000 to R2 million segment.

He cautions that execution risk remains the largest constraint. Infrastructure funding must translate into visible service delivery improvements to sustain investor confidence.

Broader Economic Impact

‍For entrepreneurs and business owners, the VAT threshold adjustment and CGT relief provide tangible breathing room.

‍For property owners, tax stability and infrastructure reform underpin value protection. For investors, the combination of fiscal discipline and reform signals improving macroeconomic credibility.

However, fuel levy increases and persistent municipal inefficiencies remain headwinds.

The Bottom Line

‍Budget 2026/7 is not dramatic, but it is stabilising. It reinforces fiscal credibility, supports SMEs and protects disposable income. It commits to infrastructure reform. The property market will benefit from improved affordability and investor sentiment.

But the decisive factor now is implementation. If infrastructure reform translates into measurable service delivery improvements, and if interest rates continue easing, South Africa’s property and entrepreneurial sectors could enter a stronger growth cycle in 2026 and beyond.

Confidence has been signalled. Execution will determine whether it converts into sustained economic expansion.

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