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Will there be relief for property owners in the Budget?

Herschel Jawitz, CEO of Jawitz Properties does not expect any direct relief for property owners or buyers in the upcoming budget. “With virtually no economic growth in 2016, Treasury will be hard pressed to offer any tax relief in the residential property sector,” says Jawitz. The two areas for tax relief are to either reduce the transfer duty percentages or increase the current threshold of R750 000 below which transfer duty is not payable.
 
“There is a possibility that the R750 000 threshold could be increased to make it more affordable for first time buyers to get into the market, however, even this is unlikely,” Jawitz says.
 
Last year the transfer duty percentages at the top end of the market were increased significantly to 11% of the property value above R2,25 million and a new 6th bracket provided for duty of 13% of the property value above R10 million.  “In essence this is a wealth tax on the upper and luxury end of the market.”  Jawitz says this will remain unchanged. The only other area is to change the current R2 million Capital Gains Tax threshold, however once again, this is a luxury tax and is unlikely to be lowered.
 
“In general tax payers can expect very little tax relief from the upcoming budget other than some adjustments for basic earnings inflation. Tax payers will continue to bear the burden of an under-performing economy due mostly to chronic leadership in the country and the continued corruption and wasteful expenditure that continues unabated under the current government,” Jawitz concludes.


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