|Herschel Jawitz, CEO of Jawitz Properties, has strongly welcomed the budget presented by the Minister of Finance as the best property budget yet.|
Direct relief comes in the form of a significant reduction in the transfer duty payable through the increasing of the threshold from R190 000 to R500 000 below which no transfer duty is payable.
For a home costing R350 000, this amounts to a reduction in transfer duty payable of R8 600; for a home costing R500 000, there’s a reduction of R20 600 and for a home costing R2-million, a reduction in transfer duty of R34 400 is applicable. This is significant relief especially at the affordable and lower priced housing levels.
The duty payable for the transfer for properties in companies has also been reduced to 8% from 10%, which will benefit the upper priced market which tend to have more of this type of structuring.
The threshold above which capital gains tax (CGT) is payable, has also been increased form R1-million to R1.5million. This is recognition of the increase in property values and offers direct tax relief at the upper middle and top end of the property market far more so than the lower end.
There is also relief for renters in terms of the stamp duty payable with the threshold being increased from R200 to R500.
Indirectly there are also many encouraging budget developments such as the infrastructure spending for the World Cup, the continuing commitment to delivery with the setting up of a dedicated project unit to assist with implementation of projects at local level and the significant relaxation of the foreign exchange allowance from R750 000 to R2-million which will send a very positive signal to foreign investors.
Lastly, income tax relief, especially at the lower end of the earning market, combined with the transfer duty savings should really give first time buyers and low income earners food for thought and a real impetus to get into the market.