In the budget speech that was delivered on Wednesday, 21 February 2018, no major changes that specifically affect property practitioners were mentioned. Transfer duty and Capital Gains Tax will remain the same.
The most important change from our point of view, and from the point of view of all South Africans, was the increase in the VAT rate from 14 to 15%.
This will come into effect on 1 April 2018.
Remember that VAT is charged on agent’s commission, transfer and bond registration fees (and on the sale price of the property where the seller is VAT registered) so the cost of acquiring property will once again become more expensive. Amendments to our costs sheets and our online costs calculator will be made to coincide with the date of the increase in the VAT rate.
We were also advised that the Government is planning to table legislation this year in accordance with the recommendations of the Davis Commission on Tax Reform. Watch this space for commentary of the proposed changes that might affect the property market.