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South Africa’s Finance Minister, Enoch Godongwana, announced changes to transfer duties during the budget speech on February 22, 2023. The transfer duty table brackets will be increased by 10%, which means that first-time homebuyers will benefit. From March 1, 2023, properties sold between R1 million and R1.1 million will be exempt from transfer duties, and those sold between R1,100,001 and R1,512,500 will pay 3% of the value above R1.1 million. This change implies that the first R1.1 million of any property purchase price is tax-free.
The move has been welcomed by CEOs of Chas Everitt International and BetterBond, who believe it will encourage and benefit first-time buyers. Prior to the budget, property group Seeff called for the house price threshold for exemption from transfer duty to be increased, as it had remained at R1 million for more than two years. They suggest that an increase in sales volumes of homes worth over R5 million would generate more direct and indirect economic benefits than homes worth R1 million.
Despite higher-than-expected revenue predictions, Godogwana did not announce any significant tax proposals. Expected tax revenue collections for 2022/23 are projected to reach a total of R1.69 trillion, which exceeds the Budget estimate by R93.7 billion and the total Medium Term Budget Policy Statement estimate by R10.3 billion. Godogwana attributed the improvement in revenue to higher collections in corporate and personal income taxes and customs duties, offsetting lower value-added tax estimates. He praised the efficient and effective tax administration for building trust to increase voluntary compliance and boost revenue collections in the country.
2024 (1 March 2023 – 29 February 2024) – See changes from last year
| Value of the property (R) | Rate |
|---|---|
| 1 – 1 100 000 | 0% |
| 1 100 001 – 1 512 500 | 3% of the value above R1 100 000 |
| 1 512 501 – 2 117 500 | R12 375 + 6% of the value above R 1 512 500 |
| 2 117 501 – 2 722 500 | R48 675 + 8% of the value above R 2 117 500 |
| 2 722 501 – 12 100 000 | R97 075 +11% of the value above R2 722 500 |
| 12 100 001 and above | R1 128 600 + 13% of the value exceeding R12 100 000 |
2023 (1 March 2022 – 28 February 2023) – No changes from last year
| Value of the property (R) | Rate |
|---|---|
| 1 – 1000 000 | 0% |
| 1 000 001 – 1 375 000 | 3% of the value above R1 000 000 |
| 1 375 001 – 1 925 000 | R11 250 + 6% of the value above R 1 375 000 |
| 1 925 001 – 2 475 000 | R44 250 + 8% of the value above R 1 925 000 |
| 2 475 001 – 11 000 000 | R88 250 +11% of the value above R2 475 000 |
| 11 000 001 and above | R1 026 000 + 13% of the value exceeding R11 000 000 |
The property sector experts also expressed their appreciation for the announcement of a solar rebate for households looking to install solar panels, in addition to the changes in transfer duties. Under this new tax incentive, households that install solar panels will receive a 25% rebate on the cost of the panels, with a maximum cap of R15,000. While some concerns have been raised about the impact of the rebate, especially considering the high cost of solar installations, it was still widely viewed as a positive step.
The property and realty sector remain optimistic that the government will eventually extend the rebate or provide new incentives for batteries and inverters, which constitute a more significant proportion of the cost of solar installations.
Solar installations are increasingly seen as a valuable asset for properties, with many homebuyers seeking backups and other methods to mitigate the country’s persistent load shedding.
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