Rowan Alexander: Likelihood of lowered Corporate Tax holds out hope for the property market.

With its usual tendency to put a positive spin on most political and economic developments, the SA estate agency fraternity has welcomed the slightly lower property transfer duties ushered in by the latest budget. The savings that will come about as a result of these will be insignificant and will have little, if any impact on the current residential property market, says Rowan Alexander, Director of the Cape estate agency, Alexander Swart Property.

Giving specific examples, Alexander said:

• On an R1 million home the saving will amount to just R3000. (Since the new budget the price level of homes exempt from transfer tax has been raised from R900 000 to R1million and this could make it easier for developers in this price range to go ahead). On a R2 million home, the saving will be just over R10 000 (i.e. the transfer duty will drop from R60 500 to R50 250).
• On a R5 million home the reduction will amount to R17000 (from R383 000 to R366 000).
• On a R10 million home, the saving will be similar, R17000, from R933 000 to R916 000).

"Regrettably," said Alexander, "I cannot foresee these insignificant savings making any real difference to the residential property market, especially at the lower end where some form of relief is particularly needed. Those of us involved here know how some couples have to strive to find enough capital to qualify for the finance required for a loan in the region of R1million."

One ray of hope for the property sector held out by the budget speech, said Alexander, is that Corporate Tax, currently at 28%, is likely to be lowered in the foreseeable future. This, said Alexander, will help stimulate the whole economy and inject a little more cash into the system, from which the man in the street will benefit.

For further information, please contact Rowan Alexander on email: rowan@asproperty.co.za or by cell phone on 082 581 3116