2013 BUDGET REVIEW : BUSINESS AS USUAL FOR RESIDENTIAL PROPERTY MARKET
Category News
The ‘business as usual’ budget with regard to residential property was not unexpected and will have no impact on the residential market in the year ahead.
Herschel Jawitz CEO of Jawitz Properties says: The two significant issues are transfer duty and the Capital Gain Tax exemption, neither of which have changed from last year.
“A drop in the threshold, below which transfer duty is not paid, or a drop in the rate would have certainly provided a welcome boost especially for the lower end of the market and for first time buyers.
“The transaction costs for buying a property are relatively high. Coupled with deposit requirements from the banks, a first time buyer purchasing a home of R800 000 may need to have as much as R80 000 in cash to put down, pay legal fees and transfer duty. Many buyers simply don’t have that kind of money and are being kept out of the market despite being able to afford the monthly repayments because interest rates are at low levels.
“Taking government revenue from transfer duty into account, the amount collected in 2006/7 was R6.7 billion and halved in the 2011/12 year to R3.8 billion. With these kinds of numbers and general revenue collection under pressure for the government, there was never really a possibility of transfer duty relief.
“From an infrastructure point of view, the Minister has delivered a good budget but the challenge is always about delivery on the ground and the huge amounts of the budget that are wasted each year through corruption and chronic implementation,” says Jawitz.
Author: Jawitz Website
