Included in this call is a raising of the transfer duty threshold to R1m and a South African version of the United State's Home Stimulus Bill which gives a tax break of over R52 000 to first time home buyers. He feels this will reduce affordability pressure on first time home buyers. Similar moves are afoot in England and Australia. Dawie Roodt, chief economist at Efficient Group, would like to see property transfer duty abolished completely (some R10 bn per year for the fiscus) as this would ease the huge personal tax increases endured by middle and upper income earners over the last few years.
Mike Bennett. CEO of KZN's ProProp Franchising Group, agrees and adds that he would like banks to be able to relax the National Credit Act's regulations on home selling prices of under R 700 000.
Full article on RodneyHayter.com
With these thoughts in mind readers might find the graph below of interest, in which I have given a breakdown of typical costs incurred by a homebuyer/seller in a property transaction where the value of the property is R1 000 000. A number of assumptions have been made in generating it, these are:
- The value of the house bought is R1 000 000.
- The value of the bond granted is R800 000
- Attorney fees and Estate Agent's fees although representative are variable.
- The transferor is selling a house (paying an estate agent) and buying another R1 000 000 house (and therefore paying transfer fees, bond costs etc). So in essence he is involved in two transactions.
- Minimal bank charges.