Subsidised mortgages for first-time buyers may offer hope to poor
MANY involved in residential property have become uneasily aware of the resentment among poorer people that home ownership lies beyond their reach, in spite of repeated promises from the state that delivery would speed up.
“Seven out of 10 homes costing less than R500 000 now have more than one family living in them. Is it any wonder that anger is building up,” asked Bill Rawson, chairman of Rawson Properties.
One solution to the problem could be to use a portion of the fairly substantial sums that are raised each year in capital gains taxes on property to subsidise mortgage bond repayments by first-time buyers of new homes that cost less than R1 million.
“Such a scheme could make homes available to the many people who are excluded from ownership. Also, by bringing more previously disadvantaged people into established urban areas the normalisation of suburban populations, which so many people want, would become a reality.”
Rawson emphasised that his proposal stipulates that the assistance should be available only for new homes. If this is done, he says, it could overnight lead to a massive revival of development in the lowcost housing sector. This, in turn, would create considerable employment and encourage banks to lend more money to support the sector.
Rawson says what the National Treasury loses in capital gains tax would be more than compensated by improvement in the economy.