According to Lew Geffen, Chairman of Lew Geffen Sotheby’s International Realty, Minister Gordhan delivered the 2016 budget from a very tight spot wedged between a rock and a hard place, and under the circumstances did a decent job with the little he had to work with.
“It’s very clear that the Minister is working hard to shore up the currency and prevent a ratings downgrade. He was unambiguous about his intention to clamp down on government inefficiencies, wastefulness and corruption, and that message should be well received by the international community”.
“Tax relief across all but the top income brackets will also be well received by the majority of South Africans, but we were expecting a budget that targeted the wealthy and that’s exactly what we got”.
“In property terms the announcement of an increase in Capital Gains Tax is slightly concerning because it also affects properties in the mid-income range, but at the same time we’re grateful that there was no increase in transfer duties below R10 million nor an increase in VAT”.
“The currency volatility is to a large extent driving the top end of the local property market at the moment and this segment is running very hot, so a 2% increase in transfer duty on properties priced above R10m is hardly likely to put the brakes on”.
“Overall, though, if the international community is receptive to the Minister’s budget plan and the value of the currency improves it will be to the benefit of us all, so watch this space.”