Herschel Jawitz CEO of Jawitz Properties says that the increase in the transfer duty above R10-million, from 11% to 13%, amounts to nothing more than a simple wealth tax. Given the overall size of the budget and the challenges facing the fiscus, the additional revenue raised would barely be noticeable from a residential point of view.
This is an indication of how hard the government is looking to scrape every bit of revenue it can from the ‘consumer barrel’. If read correctly, the increase would mean an additional R20 000 in transfer duty per R1million above R10- million. At that level, little impact is expected on sales volumes.
The Minister would have done better to lower the transfer duty across the board in order to increase transfer duty revenue from more sales volumes, as opposed to trying to extract more duty per sale at the top end of the market – a trend which started last year when transfer duty was increased from 8% to 11% at the top end of the transfer duty table.
“South Africans continue to pay for the wastage, corruption and inefficient spend of the government. It will be interesting to see whether the government will ‘walk the walk’ with regard to cost containment measures across all departments,” he says.