What does the budget 2018 mean for property owners?Date posted: 27.02.2018 | Author: Denis Stupan
The finance minister delivered a “tough but hopeful” budget speech on 21 February 2018.
Some of the tax hikes that will affect consumers and property buyers include:
- VAT hike of 1%, from 14% to 15% which will affect everyone, save for the basket of exempt goods
- Marginal increase in upper income tax, but more relief for lower tax bracket
- Fuel levy hike which will of course have a knock-on effect on transport and living costs
The increases in VAT, income and fuel taxes will limit the ability of ordinary households to qualify for bonds and afford their own homes. Nevertheless, from a residential property point of view, there are no changes to transfer duty, the capital gains tax exemption on a primary home or the effective tax rates for capital gains.
The government has got little or no room to move, and with property price growth and the volume of sales at current levels, there was no expectation that transfer duty thresholds would be increased. The estate duty on estates above R30 million has been increased, which may impact on the luxury end of the market.. Renewed consumer confidence will be a key factor in improving property prices and demand in 2018.