Budget 2017: Property under R900 000 will not attract Transfer Duty Tax
Tabling the South African National Budget Speech 2017 on Wednesday, Finance minister Pravin Gordhan revealed that properties under R900 000 (previously R750 000) wll not attract transfer duty tax.
Minister Gordhan had a difficult budget speech to deliver as the economy struggles through its largest under performance since the 2009 recession, with the added challenge of a R30.4bn tax shortfall.
The economic growth forecast remains unchanged at 1.3% for 2017, 2% for 2018 and 2.2% for 2019.
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The wealthiest South Africans will pick up the tab for the South African Revenue Service's inability to outstrip economic growth in revenue collection.
Tax relief will be provided in the affordable housing market through an increase in the threshold above which transfer duty is paid.
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Whereas no transfer duty is currently paid on acquired property worth below R750‚000‚ in future no transfer duty will be paid on property worth less than R900‚000.
The raising of the threshold for transfer duty, as announced in today’s National Budget, is positive news as it provides some relief for first time home buyers.
A quick overview of tax increases
As part of a R28bn package of tax hikes South Africans earning taxable income above of R1.5 million per year will now pay 45% personal income tax. The top previous bracket was 41% at R701,301. On the other end of the income spectrum there is limited bracket creep relief with the increase of the tax free threshold from R75 000 to R75 750.
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While VAT remains unchanged there will be increases in the general fuel levy (of 30c/litre) and 9c/litre in the road accident fund levy. Excise duties for alcohol and tobacco will increase between 6 and 10 percent.
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