Finance Minister Pravin Gordhan announced in the budget speech that transfer duty tax will not have to be paid on properties sold for under R900 000.
Harry Nicolaides, Century 21 CEO, said this was positive news for first-time homebuyers and the affordable housing segment.
“We welcome the increase in the exempt threshold for transfer duty from R750 000 to R900 000, especially as first-time homebuyers make up the bulk of the property sales market,” he said, adding here could be an increase in property sales in this bracket after the announcement.
Bruce Swain, managing director of Leapfrog Property Group, said: “Buyers were given some relief in 2015 when the threshold was raised to R750 000 (up from R600 000 in 2014). This further increase to R900 000 will do much to alleviate the pressure on buyers, which will in turn boost the property market.”
Swain applauded both Gordhan and Human Settlements Minister Lindiwe Sisulu for appealing to home owners, especially in the lower end of the market, to hold on to their homes for longer.
“A house is an asset that can be used to generate real wealth – not just by eventually selling it for a good price, but by using it as collateral to fund a child’s education for example. This is responsible advice that ought to be applied by all South African home owners.”
The FNB Mortgage Barometer indicated residential transactions fell by 4.8% year-on-year in the 12 months to the end of October 2016.