Budget 2026: Geffen welcomes Godongwana’s pro-private sector encore

Finance Minister Enoch Godongwana delivered a 2026 Budget Speech that was notable not for what it took from South Africans but for what it gave back.

In a surprise shift, the minister withdrew a proposed R20-billion tax hike and instead offered a suite of incentives aimed squarely at empowering private citizens and fixing the broken municipal services that underpin the economy.

Yael Geffen, CEO of Lew Geffen Sotheby’s International Realty, describes the Budget as a watershed moment for the private sector and ordinary homeowners.

“This wasn’t just a Budget; it was an acknowledgment that the engine of this country is its people and its businesses,” she says. “For years, we’ve felt the squeeze. Minister Godongwana effectively said, ‘We see you, and we are going to stop making it harder.’ By withdrawing that massive tax hike and adjusting brackets for inflation, he has put money back into the pockets of households at a time when they need it most.”

A municipal shake-up that could reshape the property market

One of the headlines for the property sector was a radical intervention in local government. Godongwana announced a major reform for metro trading services, allocating R27.7 billion over the medium term to a performance-linked grant for electricity, water and sanitation.

“It’s a stark warning to badly run councils because the minister pointed to Johannesburg as a case study of failure, noting that while the city collects R11.9 billion in water revenue, only R1.3 billion is reinvested into Joburg Water, creating a massive R64-billion maintenance backlog.”

Under the new system, revenue collected for services must be reinvested into those same services, and failure to meet reform targets will result in direct budget cuts.

Geffen emphasises that this move addresses the single biggest driver of South Africa’s current property migration patterns.

“Let’s be blunt: One of the biggest reasons for the flood of semigration to the Western Cape is simple – the municipalities there work. The lights stay on, and the taps run,” she says. “If this reform succeeds in fixing infrastructure and accountability in places like Johannesburg and eThekwini, it will have a massively positive knock-on effect on the national property market.

“People don’t want to flee; they want to live where their assets are secure and their quality of life is high. If we can make municipal services work across the country, we won’t just retain residents – we’ll revitalise entire local economies.”

Encouraging savings and rewarding enterprise

The minister also took direct aim at South Africa’s low savings rate. To encourage citizens to build generational wealth, the annual investment limit for tax-free savings accounts was raised from R36 000 to R46 000. Furthermore, the deduction limit for retirement fund contributions was increased from R350 000 to R430 000, allowing individuals to shelter more of their income for the future.

“These are smart, targeted moves,” Geffen notes. “Encouraging people to save – and to save more – is exactly how you build a resilient economy. It’s a vote of confidence in our collective future.”

For entrepreneurs and small business owners – the lifeblood of the property sector – there were further wins. The compulsory VAT registration threshold was more than doubled from R1 million to R2.3 million, providing massive relief for small enterprises struggling with administrative burdens. Additionally, the capital gains tax exemption for older persons (55+) selling a small business was raised from R1.8 million to R2.7 million, making it easier for founders to retire with dignity.

Geffen also notes the significance of what was not in the speech. “There was no increase in property transfer duties, no change to the corporate tax rate, and no new shocks for businesses. In an environment of high costs and uncertainty, that stability is itself a gift.”

A turning point, not a finish line

The minister framed his speech against a backdrop of macro-economic recovery. He noted that for the first time in 17 years, debt will stabilise and begin to fall, the budget deficit has narrowed significantly, and debt-service costs are easing. He highlighted South Africa’s removal from the FATF grey list and the first credit rating upgrade in 16 years as signals of “restored credibility” and “renewed resilience”.

Geffen acknowledges these hard-won gains, but strikes a note of cautious optimism: “Make no mistake, we are not out of the woods yet. The global environment is uncertain, logistics bottlenecks remain, and we’ve seen the devastation that foot-and-mouth disease can wreak,” she says. “But for a country that has been defined by crisis for so long, a Budget that focuses on enabling the private sector and fixing the basics feels like a breath of fresh air.

“Minister Godongwana came to the podium yesterday with the weight of the world on his shoulders, and he delivered a speech that was surprisingly, refreshingly positive for those of us who work in the real economy,” Geffen concludes. “For that, Enoch deserves an encore.”