While there were no real surprises or major tax increases, from a housing market perspective, it is regrettable that Wednesday's National Budget did not seize the opportunity to extend the solar rooftop tax incentive for residential properties, as this expires at the end of February 2024.
This is the view of Dr Andrew Golding, chief executive of the Pam Golding Property group, who said that it enabled households who invested in solar panels to receive 25% of their solar spend back as a tax credit.
"Apart from hoping for an extension of this incentive, it would have been beneficial to homeowners if it had included additional costs such as generators, invertors, batteries – plus those used for security purposes – among others," he said.
While the business incentive for solar panels will run until 2025, homeowners who are beset with the soaring costs of electricity, fuel and food, among others, as well as dealing with ongoing loadshedding, would have benefited from a much-needed extension amid the country’s energy crisis, the property expert said.
"Consumers are also faced with an increase in the carbon fuel levy to 11c per litre for petrol and 14c per litre for diesel, which impacts not only on transport costs across the board, but is inflationary in itself.
"This is coupled with the fact that individuals have to contend with bracket creep, which regrettably for some, may mean that inflation-related wage increases will see their personal income possibly pushed into a higher tax bracket. Fortunately, the general fuel levy will not increase in the 2024/2025 Budget," said Golding.
He noted that given the minister’s imperative to derive increased income, it was anticipated that there would be no further relief on transfer duty on residential property transactions in the latest budget – a factor which impacts first-time home buyers wanting to acquire their own homes.
Currently, properties below R1.1 million avoid any transfer duty payments, and according to recent Lightstone statistics, the bulk of first-time buyers look to purchase in the R700 000 to R1.5 million price bands, Pam Golding pointed out.
"Of critical importance is that we begin to see significant investment in infrastructure start to take effect, which will boost market sentiment – which includes the property market – and help create a favourable and investor-friendly environment in which to conduct business – thereby increasing job creation and fuelling the economy.
"In this regard, it is encouraging to note the government’s intention to foster Public Private Partnerships (PPP’s), notably regarding financial and technical support in the logistics sector, namely rail and ports, among others, said Golding.
Most importantly, the budget managed to plug the revenue gap without adding significantly to the financial squeeze already endured by households. "It may not have been overly surprising or exciting but it was a solid, no-nonsense budget which one may be thankful for in an important election year," Golding said.
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