First-time buyers need a break - ReMax
| A serious review of laws is needed to stimulate the property
market and encourage first-time buyers.
This is the view of Jeanne van Jaarsveldt, financial director of ReMax of Southern Africa, who said he would like to see the current threshold on payment of transfer duty to kick in on sales above R1 million. This should be accompanied by meaningful tax breaks for first-time buyers.
A rescue package from government was vital to avert distress in the property market.
Van Jaarsveldt said the US government had anchored its recently launched Housing Stimulus Bill around a tax break of more than R52 000 for first-time buyers to help stabilise the market.
Van Jaarsveldt said a similar tax concession in South Africa would relieve some of the affordability pressure on first-time buyers ensnared by the five percentage point interest rate increases in the past two years.
Also worthy of considering, he said, was a temporary suspension of transfer duty on all price categories until the market moved into recovery.
He said the Real Estate Institute of Australia was pressing the government for exemption from stamp duty on first home buyer transactions, and on retirees downsizing. Britain's National Association of Estate Agents was doing the same in the UK.
Van Jaarsveldt said economists estimated that abolishing transfer tax would strip the treasury of about R10 billion a year, which would not make a serious dent in government finances, but would ease the buying and selling of homes.
Mike Bennett, head of ProProp Franchising Group, would also like to see a temporary suspension of all transfer duty on sales under R1 million until the market improves and banks are given permission to relax the National Credit Act regulations on houses selling under R700 000.
Van Jaarsveldt sees the housing market "as a pillar of our economy". He believes the current high number of negatives surrounding the market make it vital for some concession to stimulate home ownership.
"To ignore the situation seriously jeopardises the growth of the emergent black middle class who we all know are vital at this stage of our country's transformation." he said.
Article from: www.busrep.co.za