Finance minster Trevor Manuel's budget was disappointing from a property perspective, says Pieter Ferreira, director of Jigsaw, the holding company of Aida National Franchises and the Realty 1 property groups.

"There is very little incentive for new homebuyers to enter the property market. We would have welcomed a higher threshhold before transfer duty on property transactions become payable.

"A stable and sustained property market depends on new entrants and the 2008 Budget did nothing to make it easier for poorer buyers to acquire their own properties," Ferreira says.

"However, in the broader sense, the budget is a step in the right direction, since it places firm emphasis on growth and development, which, in the longer term, will filter through to the housing market."

DISAPPOINTING ‘NO SURPRISES’ BUDGET FOR PROPERTY MARKET

The budget was disappointingly what the property sector expected with little to incentivise the market says ERA Property Group, CEO Gerhard Kotzé.

It failed to reduce entry costs for home ownership, via tax relief, adjustments to estate duties, transfer duty (which currently kicks in at a rate of 5% for a property valued at R500 000) or other measures.

On the other hand the promised tax relief for ‘small to medium sized players’ (presumably small developers) could help to bring less expensive homes to the market but the quality of homes delivered by such developers would have to be carefully monitored.

It was also encouraging that National Treasury is proposing to enhance and add to incentives to encourage employers, developers, landlords and others to increase the supply of houses for low-income families and that the tax relief for the Urban Development Zone incentive which encouraged inner city rejuvenation including residential development will be extended for a further five years.

Article from: www.jigsaw.co.za