Carbon tax - what it means for the property sector

Newman said that the National Treasury had shown a preference for a carbon tax, rather than a cap-and-trade system, as a tax had some degree of certainty in terms of revenue collection and was significantly simpler to administer than a cap-and-trade system.

Speaking at the Green Building Council of South Africa (GBCSA) convention in Cape Town, Newman said that the carbon tax would have a significant impact on the South African property sector.

Initial indications are that the tax, if implemented, would be set at R100/t of carbon dioxide, creating a carbon tax bill of R45-billion a year, of which the property sector would be responsible for 23%, or R10.4-billion.

If the carbon tax were to rise to about R750/t, the property sector’s carbon tax bill would reach a staggering R77.7-billion a year.

“These numbers can be scary; the reality is that a carbon tax is coming in some kind of form and it’s important to understand how that impacts the whole property supply chain,” cautioned Newman.

However, he said that currently the real impact that a carbon tax would have on the property sector was largely unknown as there was uncertainty over who will end up paying. But Newman added that it would likely affect all involved from the concrete supplier through to the investor, contractors, landlords and tenants.

He averred that GBCSA stakeholders should ask whether it would assist the business case for green building design and retrofitting and whether the carbon tax implications would affect tenant migration patterns away from developments with large operational carbon footprints.

Development manager David Waldren from Grocon, in Australia, added that the uncertainty in the sector was problematic.

“By and large the certainty is the thing we want. I’m not going to advocate R100 or R700, I’m not going to advocate for a tax or something else. What I would advocate as a developer is ‘give me certainty’, because the projects that we’re involved in are three to five year exercises with 20 to 40 year lives.”

In Waldren’s view, a carbon tax would not be a negative thing for the property development industry as it would create an additional revenue pool in the economy and “that just spells opportunity”.

He said the industry could ignore the issue but in his opinion developers were good at making use of possibilities. “You can say there is opportunity in here somewhere, and I just need to apply my thinking power to finding where the opportunity is,” he concluded.

  Comment on this Article

  Please login to post comments

Post to my facebook wall
Characters remaining

    Latest Property News
    • 18 Jun 2018
      Many home sellers are motivated to appoint estate agents because they know that the agency will carry the costs of advertising and marketing their property.
    • 18 Jun 2018
      When a property is sold when it has a tenant in occupation, the questions often raised are: “What happens to the tenant if the landlord sells the property?”, and what rights the tenant will have with regards to cancelling the lease or enforcing it, says Sunell Afrika, rentals manager for
    • 18 Jun 2018
      Sellers are often caught off-guard by the expenses incurred in the selling of a property. Just like there is no such thing as a free lunch, there is also no such thing as selling your property without incurring at least some costs.
    • 15 Jun 2018
      The second quarter of 2018 has proven to be the turning point for Midrand’s real estate market, especially the upper end which started to waver towards the end of a tumultuous 2017 with a notable drop in both sales and average selling prices.
    • 15 Jun 2018
      According to data recently released by FNB, the average age of a South African home buyer has increased from 38 to 44 this year. In an attempt to help first-time buyers enter the market sooner, Adrian Goslett, Regional Director and CEO of RE/MAX of Southern Africa, walks us through the steps of saving for your first home.
    • 15 Jun 2018
      Putting your house on the market can be a stressful process. There are so many decisions to make that will impact how quickly your house is sold and for how much you can sell it for. It’s a serious money game where you can’t afford to make the wrong decision.
    • 14 Jun 2018
      The word tourist describes someone who is visiting South Africa for a limited time and is probably not going to buy a property here – so why is the tourism industry so important to the real estate sector?
    • 14 Jun 2018
      Serengeti Estates has entrenched its status as one of Johannesburg’s most desirable addresses for a spectrum of homeowners with its launch of The Signature Residences, a new cluster village.
    Subscribe to the MyProperty Newsletter

    Last Name  
    Email Address  
    Email Frequency
    Share this Page

    For Sale Property
    Rental Property
    More Options
    Connect with us