|Dave Rogers, MD of giant estate agency group Homenet, is thrilled with the Budget announcement regarding transfer duty relief and says it is undoubtedly one of the most positive aspects of this year's budget speech.|
Rogers notes that in the past many people were put off from moving home because of transfer duties. "The transfer duties on a home of R800 000, which is now an average price in the traditional housing market, equate to
over R54 000 - and that is before the buyer considers the actual costs of moving, electrical and phone connnections and so on. This has led to many people opting to renovate instead of moving.
"Transfer duty has also, of course, impacted negatively on the large number of people wanting to buy property for the first time.
Finance Minister Trevor Manuel agreed with the general consensus that transfer duties needed to be addressed saying that a decrease in transfer duties would encourage the secondary housing market and promote home
He announced that, effective from 1 March, houses costing less than R500 000 will attract no duty. The 5% rate will apply between R500 000 and R1million, and 8% thereafter. Furthermore, he announced that the flat 10% rate for
companies and trusts would be reduced to 8%.
"This announcement will ensure the future success of the property market and will be well received by all home buyers, especially those looking to enter the market for the first time," says Rogers, who also welcomed the increase
in the Capital Gains Tax exclusion on primary residences from R1-million to R1.5-million.
"This is tax relief is in line with the way house prices have increased, and is good news for the average seller."