Berry Everitt, CEO of the Chas Everitt International property group, says: “Given the current state of SA’s economy, we are not surprised that there was no specific relief for property buyers in the Budget in the form of a Transfer Duty reduction or even an increase in the threshold.
But we believe consumers will breathe a sigh of relief at the news that there will be no VAT or personal income tax increases this year, especially since they are facing another increase in the fuel levy and higher electricity costs.
“In addition, we applaud Finance Minister Tito Mboweni and Public Enterprises Minister Pravin Gordhan for coming up with a creative solution to ensure that SA taxpayers don’t have to pay off Eskom’s entire R400bn debt. As the public, we will hopefully only have to foot the bill of R23bn a year for the next three years to ensure that Eskom reconfigures itself - under tight supervision – and is then able to pay off its own debt. Similarly, we were pleased with the announcement that government guarantees for the debts of other SOEs are to be more strictly enforced, and that ‘strategic equity partners’ will be sought where necessary to ensure that certain SOEs are sustainably managed.”
The Budget also tackled two other thorny issues, he says, these being the need to fix SARS to ensure efficient revenue collection, and the need to shred the massive public sector wage bill. “As it is, there is a shortfall of about R15bn a year in tax collection, but the Minister’s plans to bring back the large business unit, create a new illicit business unit and tackle cross-border tax evasion are encouraging. Even more so is the news that national and provincial public sector compensation will be cut by R27bn over the next three years – and that legislators will not be getting a salary increase this year.”
“Such issues may not seem relevant to real estate, but they are very much so, in the sense that the real estate market can only thrive in a climate of growing confidence among investors, rising economic growth and increasing employment. We believe this Budget will set us on the right road to reach this scenario, and in the meanwhile we welcome the R3,7bn allocation made to assist emerging farmers to acquire land, and the R950m allocated to a new subsidy scheme for first-time buyers.”