PERSPECTIVES
2017 / 2018
Budget Speech
BY JEAN BROWN
Property experts are using words like“ pleased”,“ delighted”,“ positive” and“ exciting” again in relation to the South African property market. This is in response to an announcement by Pravin Gordhan in the 2017-2018 Budget Speech that there is to be an increase in the transfer duty threshold by 20 % ‒ a welcome relaxation in transfer duty tax for properties under R900 000.
This is good news for first-time homebuyers and the affordable housing segment.“ The increase will assist younger people as well as those in lower income groups fulfil their dreams of home ownership,” says Linda Erasmus, CEO of Fine & Country sub- Saharan Africa. Erasmus also adds that this decision by Government should activate the investment market once again.“ This will, in turn offer good rental opportunities, especially closer to the bigger city and urban hubs,” she says.
With first-time homeowners making up the bulk of the property sales market in South Africa currently, Harry Nicolaides, the CEO of Century 21, believes that the increase should encourage more sales in properties under R900k.
Carol Reynolds, Pam Golding Properties area principal for Durban Coastal, feels that the announcement is also good news for small business enterprises that are“ looking to acquire their own
small sectional title office or light industrial space and who would be purchasing in a non-VAT related transaction”.
While South Africans will be hit with, in essence, a double taxation on fuel in the 2018 / 2019 financial year( with the removal of the zero rating of VAT and an increase of 30c / litre in the general fuel levy), Dr Andrew Goldberg of the Pam Golding Property Group anticipates a boost in demand for residential property ‒ both to acquire and rent ‒ as residents seek to find homes within easy reach of their work and other amenities.
“ This presents an opportunity for developers to look to cater for this market, and may well give rise to further sectional title projects being launched in strategic locations,” says Dr Golding.
Less encouraging is the 45 percent tax rate set for those with a taxable income of over R1.5 million per annum. Dr Golding believes setting the bar at this rate“ sends a less than encouraging signal to high net worth investors”, which he feels may dampen interest in luxury homes in the upper price band.
RESOURCES
Fine & Country, Century 21, Pam Golding Property Group
64 MARCH 2017 SA Real Estate Investor www. reimag. co. za