The real estate industry has welcomed Finance Minister Tito Mboweni’s latest budget, describing it as positive…

Its good news for homeowners and consumers who will not have to face tax hikes, rather Treasury is providing tax relief in the form of a 5% adjustment in the personal income tax brackets. This will bring some relief for low to middle income earners.

Samuel Seeff, chairman of the Seeff Property Group says, “the outlook for the interest rate remains positive and property buyers can still take advantage of the five-decade low borrowing costs.”

According to Seeff, “It remains one of the best times ever to buy property and Seeff expects the market outlook to remain positive based on current conditions. As we have seen over the last year, the bulk of the activity will be below R1,5 million and up to R3 million in the high  end areas.”

While much of the response has been positive, Seeff says there’s been a missed opportunity. According to him, transfer duties which include the R1 million exemption threshold remains unchanged, “Some relief here, especially at the higher end where transfer duty was increased three years ago could have gone a long way in driving higher sales in the property market and in turn higher transfer duty revenue and economic contribution.”

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No decrease in corporate tax?

Berry Everitt, CEO of the Chas Everitt International property group, was disappointed that there was no decrease in the corporate tax rate, based on the fact that private companies stepped up and have done so much over the past year to assist their own employees and support various charity organisations in the provision of food, water and shelter to the poor and unemployed.

But the group hailed Treasury for not implementing the R40 billion rand tax hike proposed in October as well as the extension of the Covid-19 special assistance grant for the poor households until the end of April as well as the other grants and says it will go a long way.

More job creation is needed

“From a real estate point of view, we will only be able to sustain or grow the current level of activity in the market if there is significant economic recovery and job creation within the next 12 to 18 months – and that can only happen if SA rolls out vaccines and achieves “herd immunity” in tandem with its main trading partners around the world,” says Gerhard Kotzé, MD at RealNet estate agency

A night “in” will cost you a lot more in the new financial year as sin taxes are burdened with higher tax rates. Household budgets will need to absorb the 15.63% electricity hike from the 1st of April along with a 26c per litre increase in the fuel levy which means the cost of living is about to go up.

 

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