Latest Update For South African Homebuyers: Yes, completely stony news added to the pile for most South African households in a budget filled with other unpleasantries such as the inevitable tax hike with looming shadows, deductible relief on personal income taxes, and development. There is this small thing worth celebrating, especially in the context of first-time homebuyers.
Therefore, this is a kind of breakdown. So, the reality of life in Mzansi is that it is already rough: high household debt, ever-increasing cost of living, and really no clear relief as far as interest rates are concerned. Then comes Budget, and it has not done us many favours-it actually turned on the screws.
Incoming VAT Increase
Government had originally proposed a 2% increment of VAT to 17%. However, coalition partners from the Government of National Unity said, “No ways!” So, Treasury scaled it down-for now. Again, we’re getting a VAT increase of 0.5% in 2025 and another one in 2026. It’s still very far from the original plan, but it is not bad either.
The expect 0.5% increase from VAT in 2025 alone will amount to R13.5 billion, while the original 2% increase would have yielded a whooping R60 billion. So ja, they are taking it easy.
Tax Brackets Frozen
The other dampner is the fact that personal income tax brackets were not adjusted. Wha that means to the grated salary increased would push more people into higher tax brackets and that was called bracket creep-elusive, ne? The trick is that you now pay more tax while not really having been taxed more. This little trick will supposedly bring in R28 billion more for the coming year, into 2025/26.
Transfer Duty Exemption Goes Up
For those much-hoping for getting onto the property ladder, here comes good news: the transfer duty exemption threshold has been withdrawn from R 1.1 million to R 1.21 million. That’s a round 10% hike – which saves up to R 110,000 for buyers in up-front costs – money that could easily go towards bond registration, legal fees, or even furniture.
Transfer Duty is basically a tax you pay whenever transferring ownership of a property – unless you are buying within the threshold. So now, any property under R1.21 million? No transfer duty. Boom.
Better Times For First-Time Buyers?
Samuel Seeff, chairperson of Seeff Property Group, says that this merged with the marginally lowered interest rates is good news for first-time buyers. The average first-time home price now according to ooba (a mortgage originator) is round R1.264 million, so this makes a difference to them because there is a change.
The Lightstone data shows that most first-time buyers shop in a price bracket of R700 000 to R1.5 million. And here’s the pincher: 46% of all home loan applications late last year came from first-timers. Interestingly, the activity in buying was higher in the second half of the year 2024, where a growth comparative to the first half was 9%.
Also, a lot of young South Africans are still keen to buy – Gauteng, especially, where buyers under 35 comprise about one-third of home sales in some areas. The East Rand is followed – at 50% – coming after it are Johannesburg, Tshwane, Soweto and other metros like Bloem, PE, Durban, and Cape Town at 26–28%.
And, banks are still giving out 100% home loans, sometimes covering transfer and legal fees. So, it will be much friendlier for first-time buyers in 2025 as compared to last year.
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