Comments below by Dr Andrew Golding, chief executive of the Pam Golding Property group
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.
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.
All comments above by Dr Andrew Golding, chief executive of the Pam Golding Property group
For further information visit www.pamgolding.co.za
