South Africa's National Budget has been welcomed by property experts, who say it will offer a range of benefits for homeowners and those looking to enter the market.
From a residential property perspective, the announcement that the brackets of the transfer duty table will be increased by 10 percent, allowing properties below R1.1 million to avoid any transfer duty payments, is welcome news for aspirant home buyers.
“This will in some measure help make home ownership more accessible for first-time buyers, particularly as the average price paid by first-time home buyers, according to ooba, currently stands at R1.13 million (January 2023). Also, according to ooba, applications from first-time home buyers rebounded to 47.7% in January 2023, following a low of 45.8% (December 2022), which was the lowest reading since early 2017 as the cumulative impact of repeated interest rate hikes weighed on household finances," said Dr. Andrew Golding, CE of the Pam Golding Property Group.
More good news for homeowners is the offer of a one-year tax rebate of 25% of any expenditure on solar panels, even though this is capped at R15 000.
"Even more exciting, though, is the two-year incentive on the table for small businesses to invest in renewable/ alternative energy generation. They can reduce their taxable income by 125% of whatever they spend to generate their power in this way, and there is no limit at this stage What is more, the government is providing guarantees on Bounce Back loans that will make it easier to obtain bank finance for their installations.
"We foresee that this will lead to the creation of significant extra capacity by businesses, which could then all be fed back into the national grid to help relieve the current shortfall of 4000 to 6000MW and end load shedding," added Gerhard Kotzé, MD of the RealNet national estate agency group.
Dr. Andrew Golding said that they would have liked to have seen tax relief measures further extended to individuals having to invest in a range of additional costs. These include gas stoves, generators, invertors, UPS devices, surge protection devices, battery-powered LED lighting, the costs of purchasing and running generators, batteries – including those utilised for security purposes, and the like.
"Surely such items, which carve a chunk out of household disposable income and which have become a necessity - amid the National State of Disaster declared for the energy crisis - should be considered for tax relief for financially over-burdened consumers,” Golding said.
Lew Geffen Sotheby’s International Realty CEO Yael Geffen says a government bailout of Eskom was inevitable in this year’s budget, but given the SEO’s entrenched culture of corruption and mismanagement, the Treasury cannot be permitted to give R184 billion of taxpayer money directly to Eskom to service debt.
“That money belongs to the people of South Africa, and we have the right to demand that the government acts in a fiscally responsible manner.
“If the Finance Minister wants South Africans to assume R254 billion of Eskom’s debt, then the government should be responsible for ensuring that the money is spent responsibly.
“Our economy cannot sustain another 207 days of load shedding this year. It’s make or break time for Eskom and the government needs to hold Eskom and itself accountable to the citizens of South Africa.”
Berry Everitt, CEO of the Chas Everitt International property group says there were quite several "positives for property" in the Budget speech including the R13bn worth of tax relief for individuals and businesses, including increased tax thresholds for personal income tax and no increases in the general fuel tax or road accident fund levy.
The tax-free lump sum that retirees can claim has also been increased, to R550 000. This will put more money in the pockets of consumers who are struggling with the increased cost of living and ease the financial pressure on many existing homeowners.
Adding that the extension of the diesel subsidy for generator operation to food manufacturers will hopefully also help keep food price increases down.
He also said that the increased spending on infrastructure and the implementation of many large projects will not only provide many jobs but will also improve the living conditions in many towns and cities and make them more attractive to residential and corporate property investors.
