Sub­sidised mortgages for first-time buy­ers may of­fer hope to poor

Weekend Argus (Saturday Edition) - - PROPERTY -

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.

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