The National Budget 2026 presented on the 25th of February by Finance Minister Enoch Godongwana, emphasised stability, and the conditions for an improved economic outlook. It delivered measures aimed at tax stability and enhanced household income protection while paving the way for improved business confidence.
The Minister noted that the national debt had stabilised, and that the focus is now on reducing the debt, and the monthly interest payments. The economic and investment outlook is also much-improved. Additionally, he announced the formal withdrawal of the planned R20 billion tax hike (including a VAT hike).
On the positive front, the Minister highlighted the removal from the FTAF Grey List and first credit rating upgrade in 16-years as an important step, along with the lower inflation and strengthened Rand. This is had led to a revised GDP growth rate outlook to 1.6% (from the previous 1.4%).
Relief for Consumers and Households
The Budget included a number of welcome relief measures aimed at improving the purchasing power of households.
These include the Personal Income Tax brackets adjusted for inflation, providing R13.7 billion in tax relief. Medical rebates (also adjusted for inflation) increased the allowance to R376 per month for the first two members.
The annual tax-free investment limit also increased to R46,000 (from R36,000) and the retirement annuity deduction cap increased to R430,000 (from R350,000). Social grants also increased, supporting vital national stability.
Property and Capital Gains Tax (CGT) Relief
For the first time since 2012, the exclusion limit for Capital Gains Tax (CGT) on the sale of a primary residence was increased to R3 million (from R2 million).
The CGT exclusion on the event of death also increased to R440,000 (from R300,000), and for individuals, it increased to R50,000 (from R40,000).
The CGT exclusion for the disposal of small business assets increased to R15 million (from R10 million), and for individuals over the age of 55-years to R2.7 million (from R1.8 million).
Relief for Small Businesses and Developers
Most notably, the threshold for compulsory VAT registration more than doubled to R2.3 million (from R1 million set in 2009). These measures will ease the administrative burden and allow more retained earnings to reinvest and grow.
To boost small business growth, the Turnover Tax exemption threshold for micro businesses increased to R600,000 (from R335,000).
Other measures centred around municipal and housing reforms and highlighted the significant R1 trillion infrastructure investment planned over the medium term. This will provide a vital stimulus to the construction, logistics, and related sectors.
In conclusion, Budget 2026 added no further financial strain and provided relief. The adjusted tax brackets will free up some disposable income. Additionally, the confirmed lower inflation target of 3% and potential for further interest rate cuts this year will further ease the burden on consumers with mortgage loans, and improve affordability for potential purchasers.
Overall, the outlook for the local property market remains positive. If you would like to know more about opportunities in the current market, please feel free to contact us at any time.
