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Highlights Of The Budget Speech 2020 - Effect on Property Market

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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
R11 000 000

 

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
Author STBB
Published 26 Feb 2020 / Views -
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