Budget 2012 is good news for first time buyers, but property transaction costs remain a concern

Samuel Seeff

Although Seeff remains concerned about the impact on the already onerous transaction costs that flow from property transactions, chairman, Samuel Seeff nonetheless welcomed Finance Minister, Pravin Gordhan’s 2012 Budget as responsible; one that sends an overall positive message to the country in light of the prevailing economic uncertainty.

Property ownership is the cornerstone of a healthy economy and the introduction of a gap housing subsidy is something that we have been calling for and welcome. This will instil confidence in the affordable home market and assist the banks in making more funding available to this sector. Home ownership not only creates long-term security and stability, but is one of the most effective ways to build wealth. It creates a foundation for future growth and will have a positive effect on the country’s GDP.

While Seeff welcomes the increase of the capital gains tax exclusion threshold from R1,5 million to R2 million as an important step in encouraging more investment in property, he expressed concern in the increase in the capital gains tax. This, he says will impact the upper sector of the market where there is already significant pressure. While we fully understand and support the need to raise additional funding, we would urge government to guard against measures that would lead to property transactions costs playing a disproportionate role in the acquisition of property.

Seeff also welcomes the possible extension of the tax incentives for Urban Development Zone property investments which he says is an important step in encouraging investment in the country’s city centres.

On the whole, Seeff applauded government’s budget goals of job creation, poverty reduction, infrastructure development and economic expansion.