Transfer duty relief welcomed

Move great news for first-time home-buyers particularly, say Bay estate agents

ESTATE agents have welcomed the increase of the transfer duty exemption on properties valued between R750 000 R900 000, saying it will positively affect property sales in Nelson Mandela Bay.

The increase translates into a 0% transfer duty for houses valued at less than R900 000.

But houses between R900 000 and R1 250 000 will come with a 3% transfer duty. Those wanting a house between R1.25-million and R1.75-million will pay R10 500 plus 6% of the value above R1.25-million.

And if you are in the market for a house worth R1.75-million and above, you will be liable for R40 500 transfer duties plus 8% of the value above R1 750 000.

The changes, announced by Finance Minister Pravin Gordhan yesterday, come into effect on Wednesday.

Bay estate agents said any relief for consumers in the property market was good news.

Pam Golding’s Ian Olivier said Gordhan’s decision to increase the transfer duty exemption was relevant to the Port Elizabeth property market where most houses fell below the R900 000 threshold.

He said the increase in the threshold meant that for a R900 000 property the transfer duty saving would be about R4 500.

“This is great news for the consumers and us. We expect buyers to be more active in the market as a result, especially in Port Elizabeth.

“And while the saving is only about R4 500, it’s still a lot of money to someone who doesn’t have it,” Olivier said.

“What this means is that owning a property has become a lot more accessible and affordable for the consumer and will surely increase the number of first-time buyers.”

Harcourts Beachfront owner Nikki Strooh said the benefit would be felt by first-time home-buyers.

“It is a welcome relief for the real estate industry and one which will especially benefit first-time homebuyers and those in the more affordable [property] sector.”

Strooh said she saw this as the government’s way of bringing more relief to the “not-so-wealthy”.

“The increase in property prices is not nearly as much as the jump in the transfer duty exemption, which definitely benefits potential buyers.”

Jawitz Properties chief executive Herschel Jawitz called it an “exciting move” by the Treasury, especially for first-time buyers.

“At this level of the market, a R4 500 [saving] is a meaningful amount which will pay towards other transaction costs, which is very positive,” Jawitz said.

“Often first-time buyers qualify from an affordability point of view but don’t have enough for the transaction fees or deposit to buy a property. This will make a difference.”

Engel and Völkers Port Elizabeth owner Brett Grant said he was certain the announcement would stimulate growth in the Bay’s real estate industry.

“What happened last time the threshold was increased, is that the banks followed suit and increased loan-to-value ratios up to R750 000.

“I assume the same will be done now and as a result it allows the consumer to choose from a much wider pool of houses in a bracket which becomes more accessible because of the potentially increased loan-to-value ratios,” Grant said.

Chas Everitt International owner Charlotte Vermaak said: “It will definitely assist the PE market in particular, because now housing becomes a lot more affordable for people in industries like the automotive sector.

“These people, many of whom didn’t qualify in the past, now have easier access to more finance as a result and subsequently more options for potential houses to buy.”