Impact of the Budget Speech on property market
Norman Raad - Commentary on the 2023 Budget Speech
A number of property-related initiatives announced in the Budget will help encourage the property sector, but more needs to be done to encourage business efficiency in the country.
The speech by finance minister Enoch Godongwana focused heavily on helping businesses and individuals finance renewable energy, but Norman Raad, CEO of Broll Auctions and Sales, believes government needs to drive more initiatives within municipalities to remove layers of bureaucracy and get developments off the ground. “More needs to be done to create an efficient, user-friendly environment,” he said.
Here are some of the property-related initiatives announced
Transfer duty exemption increased
The threshold of transfer duty exemption increased from R1-million to R1.1-million, meaning that properties below this will avoid paying transfer duties. “This is in line with building price and inflation increases, and was much needed for those in this income bracket to get onto the property ladder,” Raad said.
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Urban Development Zone incentive
This tax incentive will be extended for two years in a move which Raad said was “positive” and would further stimulate growth and building in these zones. “We need to see more such incentives from government.”
Energy Bounce Back Scheme
The Energy Bounce Back Scheme, to be launched by National Treasury in April, “will help small businesses finance renewable energy products, and those installing solar will be able to borrow finance for working capital”.
Renewable Energy Fiscal Support
From next month, businesses will be able to reduce their taxable income by 125% of the cost of an investment in renewables. “This is an encouraging start to help people consider solar initiatives, but more support could be offered by government as solar costs are high. Tenants want leases in buildings which offer uninterrupted services, and this will reduce costs of running diesel-powered generators, so it is a positive move and we hope many businesses will take advantage.”
Norman Raad Broll Auctions and Sales Chief Executive Officer