Homeowners are hoping Finance Minister Enoch Godongwana will offer relief from "bracket creep" - a "silent tax" that steadily erodes disposable income - during his 2026 Budget Speech on Wednesday.
Image: Armand Hough / Independent Newspapers
Limited changes to key property taxes amid fiscal constraints could maintain support for the residential market's gradual recovery.
This is according to Herschel Jawitz of Jawitz Properties, ahead of the 2026 National Budget by Finance Minister Enoch Godongwana on Wednesday.
With regards to the Transfer Duty Threshold, Jawitz says the current exemption threshold stands at R1.21 million, raised in the 2025 Budget to ease entry-level buying, with brackets adjusted for inflation.
“Expect no upward adjustment this year, as analysts note Treasury's revenue needs limit further relief, though stability would aid first-time buyers in a market with improving affordability.”
Capital Gains Tax rates remain unchanged, with individuals at a 40% inclusion rate (effective max 18%), R40,000 annual exclusion, and R2 million primary residence exemption, says the property company
“No increases in the exemption expected as this is essentially a luxury tax.”
Fiscal discipline could further boost consumer and housing sentiment, and positive signals like municipal funding oversight may enhance property confidence, supporting already stronger demand and transaction volumes in the residential market, says Jawitz.
In its budget preview, the Nedbank Group Economics says it does not anticipate significant tax announcements, but the Treasury is well-positioned to grant tax relief to individuals, following the recent trend of no adjustments.
It says the PAYE (pay as you earn) brackets were not adjusted for the effects of inflation in FY24 and FY25. “The tax windfall gives the National Treasury leeway to provide individual taxpayers with relief by adjusting tax brackets by at least 3%.”
It also says that the transfer duties on properties will likely be little changed following the 10% adjustment in FY26.
“New tax incentives will be limited. In the State of the National Address (Sona), the president announced that tax incentives for investment in energy-efficient vehicles were imminent. These will include a 150% tax deduction and measures to support battery production. We do not expect additional incentives.”
To free up disposable income, there should be no increases in personal or corporate taxes, and no adjustment of tax brackets, which would further burden the "inverted pyramid" of the tax base, says Samuel Seeff, chairman of the Seeff Property Group.
Seeff says the threshold should increase to R1.6 million, the current average property price. “This move would significantly lower the barrier for first-time buyers and boost sales volumes.”
With regards to Capital Gains Tax (CGT) reform, the property group says the primary home allowance has remained at R2 million since 2012; it should increase to R3 million to reflect current property values.
“Additionally, the government should consider enabling loan interest as a deduction to reduce the gains and avoid “double taxation” (since the interest is paid from after-tax funds).”
Quality infrastructure, including reliable roads, consistent water supply, and stable energy, is absolutely vital for economic growth, property demand and value, the chairman says.
He adds that these are the primary catalysts as people want to live and work in conducive areas. “Issues around municipal decline must be addressed. The economy and property values are inextricably linked to local government performance.”
For homeowners, the current decline in bond yields is encouraging and supports expectations of further interest rate cuts in the months ahead, says Stephan Potgieter, CEO of BetterHome Group Mortgage Origination and BetterBond.
He says a more accommodative lending environment would provide welcome stimulus for the housing market, which is already showing signs of renewed momentum.
“The Minister may also allude to the proposal to move away from the prime lending rate (PLR) and toward the SARB policy rate (repo rate) as the reference point for loan pricing. This would be a positive step toward simplifying pricing structures and improving transparency for borrowers.
"While it would not automatically mean lower lending rates, it would increase visibility around bank margins and pricing.”
Homeowners will also be hoping for relief from the “silent tax” of bracket creep, where inflation-linked income increases push taxpayers into higher brackets and steadily erode disposable income, says Potgieter.
“BetterBond’s data shows that homebuyer incomes have risen faster than inflation over the past four years, yet affordability remains under pressure as higher tax burdens reduce actual household income. An inflation-linked adjustment to personal income tax brackets would help protect households’ disposable income and support market activity.”
He says that it is unlikely that Godongwana will adjust the transfer duty threshold again so soon, following the increase to R1.21 million in 2025, which saved first-time and entry-level buyers thousands.
However, targeted tax incentives for green or sustainable home improvements would be a welcome intervention to lower upfront costs and reduce long-term household energy expenses, he adds.
The CEO says that as South Africa enters a local government election year, the budget’s focus on infrastructure investment will be critical. He says they hope to see the budget support President Cyril Ramaphosa's Sona commitments with meaningful infrastructure allocations, as municipal performance is increasingly influencing home buying and investment decisions.
“Properties in well-managed municipalities are outperforming the broader market in terms of value growth, and homeowners will be looking for budget allocations that support service delivery and infrastructure reliability.”
A budget that is focused on revenue stability and economic growth will boost buyer confidence, allowing the property market to build on the momentum we have seen over recent months, Potgieter says.
“It could also help strengthen the case for further repo rate cuts in the months ahead.”
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