Highlights Of The Budget Speech 2020 - Effect on Property Market
Minister of Finance, Mr Tito Mboweni, delivered the National Treasury's budget for 2020/2021 this afternoon.
It was a fairly quiet budget speech for the property sector and the only change of note was the increase in the threshold for transfer duty which was increased from R900 000-00 to R1 000 000-00. This will be effective for all deeds of sale signed from 1 March 2020.
This means that purchasers of properties for R1 000 000-00 or less will now pay no transfer duty and the costs of transfer for all sales above R1 000 000-00 will be reduced by at least R3 000-00.
The other amendments which stand out:
- Above inflation adjustment to personal income tax brackets. (This was not done last year)
- Inflationary adjustment to transfer duty rates.
- Allowable increase to tax free savings increased from R33,000 to R36,000.
- Sunset clauses in respect of certain corporate incentives.
- Limitation placed on use of assessed losses.
- General fuel levy increases by 16 cents per litre on 1 April 2020.
- Increased excise duties on tobacco and alcohol.
- Plastic bag levy increases to 25 cents per bag.
Transfer Duty rates effective from 1 March 2020 are as follows:
|
Value of property |
Rate |
|
Up to R 1 000 000 |
0% |
|
R1 000 001 - R1 375 000 |
3% of the value above R1 000 000 |
|
R1 375 001 - R1 925 000 |
R11 250 + 6% of the value above R 1 375 000 |
|
R1 925 001 - R2 475 000 |
R44 250 + 8% of the value above R 1 925 000 |
|
R2 475 001 - R11 000 000 |
R88 250 +11% of the value above R2 475 000 |
|
R11 000 001 and above |
R1 026 000 + 13% of the value exceeding |
The good news in terms of which was NOT introduced - despite a lot of speculation regarding especially VAT:
- No wealth taxes per say
- No DWT increases
- No increase in VAT
- No increase in Company Income Tax
- No changes to retirement tax tables