Prominent voices in the property sector reflect on Finance Minister Enoch Godongwana’s 2025 national budget speech. Access the full Budget Speech here.
Herschel Jawitz, CEO, Jawitz Properties
“Surprisingly, the transfer duty tables have been adjusted to account for property price inflation, which is good news for buyers. For a start, the threshold below which transfer duty is not payable has increased by 10%, from R1.1 million to R1.21 million. For a first-time buyer, the savings will be R3,300, which is a meaningful amount of money. The transfer duty saving will be similar for a purchase price of R1.5 million. On a purchase price of R2 million, a buyer will now pay R7,839 less transfer duty than last year.”
He adds: “The adjustments to the transfer duties send a very positive signal to the market, which is already starting to see the benefit of lower interest rates and improved overall sentiment. Buyers are feeling more positive, and the transfer duty adjustments will add to the improved level of buyer activity we are seeing in the market.”
“Given the state of the country’s finances and the fact that property prices in most parts of the country have not increased by 10% over the last few years, the adjustment to the transfer duty brackets by 10% is surprising and very positive. There have been no changes to the Capital Gains Tax on the sale of residential property.”
Dr Andrew Golding, Chief Executive of the Pam Golding Property Group
In summation: National budget shows increased infrastructural spend in key property growth hubs against backdrop of disappointing VAT increase.
“It was positive to note that the critical need for infrastructural improvements has been highlighted in today’s National Budget, as investment in sound infrastructure with a focus on energy, clean water supply and effective sanitation, well-maintained roads and other transport facilities, as well as affordable and effective broadband connectivity, promotes economic growth, and fosters employment opportunities.”
“It also ultimately attracts new businesses and both residential and commercial property development and helps foster thriving economic hubs. This is evidenced by the semigration trend, which continues to see home buyers relocate to municipalities with good infrastructure and sound management.”
Golding adds: “Investment in owning one’s own home is recognised as a key aspiration for people across all sectors of the market, with benefits including capital appreciation and potential rental income. According to the Pam Golding Residential Property Index, national house inflation continues to gather momentum, rising to +5.75% in January 2025, which is higher than the post-pandemic peak of +5.6% in May 2021.”
“While the National Treasury was faced with a challenging balancing act in delivering the National Budget, the increase in VAT, albeit 0.5% in the short term – with a further 0.5% the following year (2026/27) – will impact already cash-strapped consumers, particularly those who can ill afford it – this despite the increase in zero-rated foods to cater for the poor.”
“With citizens about to be hit with hefty electricity hikes – which will attract increased VAT, this simply increases financial pressures on consumers who must also pay VAT on other municipal tariffs – all of which adds up to a sizeable share of their monthly income.”
“From a property perspective, there are a number of VAT-inclusive services associated with the purchase of a home, for which buyers will need to allocate additional budget, which will impact particularly on first-time buyers seeking to gain a foothold on the first rung of the property ladder. Furthermore, purchasers of new-build units will also be affected, as VAT is incorporated in the purchase price of new developments when brought to market by developers.”
“There was some good news for homebuyers in the Budget, as the thresholds for transfer duties will be adjusted by 10% to compensate for inflation. Obviously, it was difficult to adjust the transfer duty thresholds again with current pressure on the fiscus, but the threshold for exemption from paying transfer duty was lifted from R1.1 million to R1.21 million This is particularly positive news for first-time homebuyers as the average price paid by a first-time buyer in early-2025 was R1.24 million, according to ooba Home Loans.”
“The fact that the fuel levy has not been increased is positive, however, South Africans across the board will be negatively impacted by the lack of inflationary adjustments for personal income tax bracket creep, and for medical tax credits.”
“It is hoped that a clear focus on fiscal consolidation will bear fruit, with the stabilising of debt.”
He concludes: “As noted in the Budget speech, the key issue that needs to be addressed is the lack of economic growth. This requires macroeconomic stability – which this budget delivers even as it places pressure on households.”
Berry Everitt, CEO of the Chas Everitt International property group
Nice try but no cigar for this Budget!
“The VAT increases proposed in the Budget presented this week could be seen in a good light, because they would result in the additional tax required to fill the current revenue shortfall being collected from all consumers and not just the registered taxpayers who are already carrying too big a burden.”
Everitt notes that this certainly appears to have been the thinking behind the decision made by Finance Minister Enoch Godongwana, to raise VAT rather than doing away with the Social Relief of Distress (SRD) grant or increasing corporate and personal income taxes.
“Indeed, he acknowledged that South Africa’s corporate and personal income tax collections as a percentage of GDP are already higher than those of most developing countries and that increasing these at this stage would most likely have a negative effect on investment, economic growth and job creation.
“The proposed VAT increase of 0,5 percentage points would, on the other hand, be an additional tax distributed across a far greater number of people, resulting in it having a much lesser effect on each individual.”
In addition, Everitt says, the Budget makes provision for the potential impact on lower-income households to be further lowered by expanding the basket of VAT-exempt products, providing above-inflation social grant increases, not increasing the fuel levy and assisting PRASA to lower the cost of transport for millions of rail commuters.
“And on top of that, the Budget allocates an additional R7,5bn to SARS over the next two years to help it broaden the tax base and spread the overall tax burden more equitably by identifying individuals and companies that are not paying their fair share of taxes and forcing them to become compliant.”
However, he says, it is disturbing that while providing for a comprehensive review of government budgets and spending to be undertaken in the Office of the President, the Budget makes no mention at all of the urgent need to reduce the size of SA’s bloated and notoriously ineffective public service and the accompanying wage bill,
“In fact, it provides for taxpayers to fork out an additional R23,4bn to cover that wage bill over the next three years – a sum that equals more than half of the additional R42,5bn in revenue the proposed VAT increases are supposed to generate.
“Meanwhile, the renewal of the SRD grant for another year will cost taxpayers a further R35bn, and the really ugly news is that after all is said and done, the budget deficit is not expected to be eliminated over the next three years. Predictions are that it will only drop from 5% of GDP to 3,5% of GDP.
“At the same time, while the country’s debt as a percentage of GDP is expected to decline from 76,1% to 75,1%, the real costs of servicing that debt will rise massively from around R390bn a year to R480bn a year. We are thus not surprised that the DA is refusing to support the Budget in its current form and calling for a rethink that prioritises investor confidence, real economic growth and urgently needed job creation.”
