Those buying property worth up to R900 000 will not be required to pay any costs in relation to transfer duty, meaning low earners, especially first time property buyers, will find house-hunting more affordable.
The Minister said this when he tabled the 2017 Budget at the National Assembly on Wednesday.
“Relief will be provided in the affordable housing market through an increase in the threshold above which transfer duty is paid from R750 000 to R900 000,” he said.
This proposal will come into effect on 1 March 2017.
Tax proposals to raise R28 billion
The Minister said for many years, South Africa has enjoyed the benefit of tax revenue collections outstripping economic growth.
This, he said, contributed to government’s capacity to expand public service delivery.
“This year, revenue has lagged behind the economy, leading to a R30 billion shortfall by comparison with the budget estimate a year ago.
“The tax proposals this year will raise an additional R28 billion, by comparison with revenue estimates based on full adjustment of personal income tax and excise duties for inflation.
Also forming part of the main proposals includes:
- An increase in the dividend withholding tax rate from 15% to 20%.
- Limited bracket creep relief, increasing the tax free threshold from R75 000 to R75 750.
- An increase of 30c/litre in the general fuel levy and 9c/litre in the road accident fund levy.
- Increases in the excise duties for alcohol and tobacco, of between 6% and 10%.
The Minister said, meanwhile, the annual allowance for tax free savings accounts will be increased to R33 000.
He also said that the medical tax credit will be increased in-line with inflation this year.
“It should be noted though that consideration is being given to possible reductions in this subsidy in future, as part of the financing framework for National Health Insurance.”
Sugar tax consultations lead to sweeter deal
Minister Gordhan said further consultations are currently taking place on the tax on sugary beverages.
Arising from these discussions, and working closely with the Department of Health, the proposed design has been revised to include both intrinsic and added sugars.
“The tax will be implemented later this year once details are finalised and the legislation is passed.
“The proposed carbon tax and its date of implementation will be considered further in Parliament this year.”