Finance Minister Trevor Manuel’s 2007 budget was ”largely neutral” from a property perspective, Jawitz Properties commented on Wednesday.
There were no changes to transfer-duty percentages or the thresholds below which transfer duty applies, said chief executive Herschel Jawitz in a statement.
”This was largely expected given the significant relief in the 2006 budget, and the fact that the zero threshold for transfer duty at R500 000 still covers the low-price/low-income market, despite increases in property prices over the last year.”
There were also no changes to the thresholds for capital gains tax (CGT), which remains at R1,5-million. ”As the property market slows down, I would expect to continue to see marginal, if any, relief in both transfer duty and CGT.”
Additional spending on infrastructure development and the police should continue to contribute indirectly to the growth in property prices across the country, in both new and established residential areas.
”The challenge, as always, will be on delivery at a local level,” Jawitz said.
The Department of Housing was allocated R32-billion over the next three years in an attempt to reduce backlogs and fast-track housing delivery.
Manuel also mentioned the Neighbourhood Development Programme, which invites private participation in the development of previously underdeveloped areas such as townships.
Both of these aspects are critical to the future sustainability of the country, said Jawitz.
The marginal relief given to taxpayers might come the property market’s way, but Jawitz suggested people use the additional money to clear debt.
Better pay for health workers
Meanwhile, the extra money budgeted for the Health Department means better salaries for health workers — particularly nurses, it said on Wednesday after Manuel’s Budget speech.
The additional R5,3-billion allocated for human resources was in response to the department’s proposals, said spokesperson Sibani Mngadi.
”With this allocation, we are now in position to commence consultations with employee organisations on these proposals that will lead to improvement in remuneration for health workers, particularly the nurses,” he said.
Funds allocated for HIV/Aids will enable the department to increase access significantly for all to prevention, care and treatment.
”The comprehensive HIV and Aids programme is expanding at a very fast pace, making South Africa to be a country with the largest number of people on antiretroviral treatment in the world.”
Mngadi said the extra R1-billion allocated to the hospital-revitalisation programme will enable the department to sustain capital projects already under way.
”As more hospital-revitalisation projects are being completed, extra resources are needed to ensure that these hospitals have the necessary equipment, staffing and management capacity.”
Mngadi said Health Minister Manto Tshabalala-Msimang will elaborate on the use of resources in her budget speech.
Black-market trade
Increasing ”sin taxes” on tobacco encourages black-market trade and costs jobs, the Tobacco Institute of South Africa said on Wednesday.
”More than 10-million cigarettes are sold illegally every day in South Africa, with a total excise loss of more than R1,4-billion annually for government,” said institute head Francois van der Merwe after Manuel announced increases in smoking taxes in his Budget.
”The announced increases will, no doubt, further fuel the growth in illicit trade at the expense of government and the legal industry.”
Van der Merwe said the government can either deal with a legal industry that supports its actions to reduce smoking and paid taxes, or face criminal syndicates.
”The result will be that consumers will use products of which the origin, content and quality standards are unknown and which could even be more harmful to consumers, while government will not achieve its health objectives of reducing consumption.”
Van der Merwe said the consumption of legal products has dropped by more than 30% in a decade, while the illegal market has grown more than 20%.
He said the combined effect of high taxes and tight regulation of the industry has already been responsible for the loss of more than 30 000 jobs in the sector over the past decade, with more to follow. ”This is a situation that SA can ill afford.” — Sapa