David Jacobs, Gauteng Regional Manager for the Rawson Property Group, says: “Affordability and consumer confidence are the key issues in real estate and the 2020 budget speech has addressed both.
“In the first place, the increase in the Transfer Duty threshold and the R14bn worth of income tax relief that were announced will put more money in consumer pockets, and that will make it easier for potential buyers to afford the homes they want and qualify for the home loans they need. This will add impetus to a market that is already benefiting from relatively low inflation, declining interest rates and competition among the banks for new home loan business.
“In the second place, several aspects of the Budget are certain to boost consumer confidence in the future of the country. These include the announcement that the public service wage bill is to be cut by at least R160bn over the next three years, starting with a R38m saving this year, as well as the allocation of an additional R2,4bn to the National Prosecuting Authority and the Directorate of Priority Crime Investigation to enable them to actually prosecute the cases arising from State capture and corruption investigations.”
He says other Budget elements that are likely to be positive for property are the R500bn allocated over the next three years to finalise existing land claims; the restructuring of the electricity supply sector (especially the decision to allow local authorities to purchase power from independent producers) and the additional allocations to assist municipalities to provide better services and maintain their existing infrastructure.
*Transfer Duty rates effective from 1 March 2020 are as follows:
Value of property rate
R1 000 001 – R1 375 000 3% of the value above R1 000 000
R1 375 001 – R1 925 000 R11 250 + 6% of the value above R 1 375 000
R1 925 001 – R2 475 000 R44 250 + 8% of the value above R 1 925 000
R2 475 001 – R11 000 000 R88 250 +11% of the value above R2 475 000
R11 000 001 and above R1 026 000 + 13% of the value exceeding R11 000 000
*Information correct at the time of print