The 2004 Budget is good news for aspiring homeowners, savers and pensioners, says Michael Jordaan, CEO of Customer Solutions at First National Bank.
“The abolition of stamp duty on property registration will see a reduction in costs to new owners, and may well result increased switching of home loans between banks and more houses changing hands. Shrewd buyers will delay transfers until March. Stamp duty amounts to charge of about 0,2% of the bond value.
“We are also encouraged to see further steps taken towards extending affordable housing finance as home ownership is essential to social stability,” Jordaan said.
But Finance Minister Trevor Manuel had missed a golden opportunity to also remove the stamp duty on all financial transactions, he added.
“This would have lowered the cost of bank services, which is arguably of greater importance than the taxes that were removed on certain other goods, for example, DVDs and cosmetics,” Jordaan said.
“FNB welcomes the above-inflation increase in tax-exempt income from investments. This will further build a national savings culture and is a boost for pensioners and savers who have borne the brunt of sharp interest reductions of the past 14 months.
“We were especially interested to note the minister’s intent to establish South Africa as a regional financial centre, however, we can expect some strong competition in this regard from both Botswana and Mauritius. Both countries have extremely attractive tax regimes for financial institutions.
“Municipal borrowing will broaden the interest rate market and will create new investment opportunities.
“Overall, the Budget reflects a consolidation of gains made over previous years with a strong focus on sustainability. Specifically, the extension of share ownership to lower-salaried employees will deepen commitment to enterprise and ownership. This is a critical step forward in broad-based upliftment.” — I-Net Bridge