* All quotes to be attributed to CEO of Greeff Christie's International Real Estate, Mike Greeff
What was considered the toughest Budget Speech of the past decade, Finance Minister Tito Mboweni has had the unenviable task to deliver some rather unfavourable news to the nation. Mike Greeff, CEO of Greeff Christie's International Real Estate weighs in on the speech with his views on how the budget will affect the property sector.
After almost a decade of weak economic performance, there is still a lot to be positive about - from the deep and liquid capital markets to being the most diversified economy on the continent - it is not all doom and gloom.
The biggest news for the property industry is that the threshold for transfer duties has been adjusted. Property costing R1 million or less will no longer be subject to transfer duty. This is welcoming news for all. It's also great news for those wanting to purchase for more than R1 million because you will save, for example, R17,000 in transfer fees on a R2.5 million home.
Contrary to predictions, there will also be no increase in VAT which is welcoming to the public.
There will be somewhat of a relief for South Africans as Personal Income Tax brackets are adjusted above the inflation rate and this means that there will be more money coming into people's pockets.
The Finance Minister also pointed out the growth in employment due to the Job Fund projects. To date, the project has created more than 175 000 permanent jobs for the youth and have helped 21 000 young people get into internships. This is a huge positive for the property sector because as young people become financially independent, more and more young adults will be able to qualify for home loans and in turn, become property owners and increase their personal wealth.
Another highlight was the increase in the exempt amount for foreign remuneration to R1.25 million. Mboweni also promised to phase out the administratively ''burdensome'' process of emigration through SARS. These are both positives for our industry as it is welcoming for foreign investors. Investors abroad, whether South African or not, will feel less hesitant when buying property in SA because the process will no longer be as tedious and laborious as it was before.
On another positive note, the pilot of the Help to Buy scheme has supported over 2,000 families to buy their own homes. This is significant as the number of homeowners has increased, and it is only expected to increase further throughout the year. In a single year (2019), the Help to Buy scheme has supported nearly R1 billion in new lending therefore aiding in more South Africans being able to own their own home.
To quote Mr Mboweni, ''winning takes patience, prudence and perseverance. As St Paul tells us, we must run in such a way that we may win.'' There is lots of work to be done, but there is a light at the end of the tunnel and with a clear path ahead of us, we are well on our way to becoming economically sound, once more.