The increase in the transfer duty threshold from R750 000 to R900 000 should make it easier for more people to get into the housing market, but this will be at the expense of the wealthy, who will continue to contribute the lion’s share of this wealth tax to government coffers.

The increase, announced in this week’s Budget, is expressly to provide relief for lower- and middle-income households. It is effective from March 1.

Deposit requirements, along with transfer duty fees, have made it impossible for many consumers to enter the property market, Adrian Goslett, the chief executive of Remax Southern Africa, says. “The change in the threshold should change this to some degree.”

Most banks require deposits of between 10 percent and 30 percent of the asking price of a home before they will finance the transaction, he says.

Jacques du Toit, a property economist at Absa, agrees that a higher threshold will support housing affordability in view of increased financial strain that consumers and households have come under because of inflationary pressures and rising interest rates since early 2014.

Shaun Rademeyer, the chief executive of BetterLife Home Loans, says he expects to see a significant increase in home-loan applications from first-time buyers as a result of this change, “which is clearly part of a new government focus on trying to promote homeownership as the basis of personal wealth creation and one of the cornerstones of a more inclusive economy”.

But Professor Matthew Lester of Rhodes University’s Business School says that transfer duty is a wealth tax, as is estate duty, and National Treasury’s treatment of transfer duty is another example of “the wealthy taking it where it hurts”. Transfer duty on a property of R10 million or more is R933 000 plus 13 percent of a property’s value above R10 million.

At a post-budget presentation hosted by BDO in Cape Town this week, Lester said buyers of properties at the top end of the market pay capital gains tax at an effective rate of up to 16 percent when they sell their houses and then up to 18 percent in transfer duty when they buy again. When you include moving costs and “to-do” list costs, you lose up to 25 percent of equity in changing properties, Lester says.