|Herschel Jawitz, CE of Jawitz Properties commenting on Wednesday’s budget sees the likelihood of another reduction in transfer duties by increasing the thresholds at which transfer duty becomes payable. The cumulative effect of the reduction over the last few years has made a meaningful impact especially at the lower ends of the market.|
A lowing of the tax rate once again at the lower end of the market, will put more disposable income into peoples’ pockets which would help to ease mortgage repayments. This will help to offset the continuing increases in property prices.
Jawitz says there will almost certainly be an increased allocation of funds to infrastructure development and to crime prevention, both of which play a critical role in maintaining property values and ensuring that assets such as homes are protected. “The challenge is the lack of competent staff and skills shortages, at local government level which remain a stumbling block to the delivery of effective spending of the funds allocated to them.”
Further relaxation of foreign exchange control is also on the cards from his perspective, especially given the strength of the currency and the increased foreign reserve position.
“Indirectly this may boost investor confidence in South Africa and increase the flow of foreign investment, which in turn creates property demand from foreign workers coming to South Africa. However this remains to be seen, in light of President Thabo Mbeki’s recent comments on foreign property ownership in his address to the nation.”