TAX experts, estate agencies and property consultancies say the changes to property transfer duties announced by Finance Minister Trevor Manuel should promote home ownership for low-income earners and promote investment in the property sector.

For the first time in SA a tax incentive has also been introduced for reinvestment in underdeveloped areas such as Johannesburg's central business district to prevent further urban decay.

Tax relief directed to commercial property investments in the country's old centres has been widely welcomed across the property industry.

The incentives are also expected to boost the momentum of the urban regeneration programmes put in place in the past several years in areas such as the Johannesburg central business district (CBD), East London, and Bloemfontein.

It is expected that this will support small and private investors who are filling the gap left by institutional investors in the ownership of commercial buildings in the older CBDs.

A number of small and private investors snapped up Johannesburg's landmark buildings from Sanlam this week and called for government to support them in turning around the buildings and the nodes where they are located.

Manuel announced on Wednesday that the transfer duty threshold would be increased from R100000 to R140000.

Billy Joubert, a tax partner at Deloitte & Touche says the increase in the threshold will reduce the cost of buying property.

This will promote investment in property, particularly for lower income earners, says Joubert.

Transfer duty is levied on the sales of immovable property.

Joubert says that to encourage the acquisition of property the levels had been changed.

"It will also encourage savings ownership of property is a form of savings. It is also a form of investment," he says.

"However, the rate for companies and trusts will remain at 10% as was the case last year," says Joubert.

Graham Williams, a director at KPMG, says the average duty payable on a property with the value of R200000 will fall from 2,5% to 1,5%.

Williams says that in the case of a property costing R400000, the average duty falls from 4,5% to 3,9%.

Sayuri Moodliar, a manager at KPMG, says Manuel acknowledges the extent of urban decay in the country and has introduced incentives for taxpayers wanting to invest in high population areas, CBDs, inner city areas and areas with developed urban transport infrastructure.

Moodliar says the new allowances may provide some incentive for taxpayers to invest in these areas.

Joubert says the incentive will be available to owners as well as lessors and financiers of these investments.

Beric Croome, a director at corporate law advisers Edward Nathan & Friedland, says it will provide "muchneeded relief for the country's historical buildings".

"It will also result in urban renewal in areas such as Johannesburg, East London and Bloemfontein. Hopefully it will reverse the trend of migration of business," he says.

Jonathan Smith, director of property consulting group Courtwell Consulting, says the tax relief bodes well for intuitive property owners and developers.

"But one needs to bear in mind that, despite the opportunities which may arise out of this benefit, the nodes are likely to be amongst the riskiest areas in SA and considerable thought will have to be given in pursuing the benefits."

He says that the reductions in property transfer duty will further encourage movement in the residential property market, which is already seeing good growth.

"More buyers will enter the residential property market," says Smith. Last year's reductions in transfer duty helped to maintain residential property prices in positive growth territory despite several adversities like rising interest rates and high inflation.

Absa economic research senior economist Jacques du Toit says that the further reduction of transfer duty is an effort to make home ownership more affordable, particularly to the lower income groups.

"In conjunction with an increase in the government's housing subsidy, the reduced transfer duty will support the lower end of the market," says Du Toit.

In general the lower transfer duties are not expected to have a major impact on the total investment in residential property, says Du Toit.

Herschel Jawitz, MD of Johannesburg-based estate agency group Eskel Jawitz, says he is a little disappointed with tax relief directed to the residential property market. "Given the estimated increase in house prices of 12% over the last year, the actual rand value of the transfer duty to be paid has more than likely remained the same and in some cases increased, therefore limiting any tax relief in real terms," says Jawitz.