Great news for properties under R1mil

" Property purchases up to R1 million are now exempt from transfer duty payments, just one of the many reasons to buy property this year. "

Budget 2020 brought some relief for the property market in the form of an adjustment in the transfer duty threshold to R1 million (from R900 000) and personal income tax relief. Plans to lower the corporate tax rate and steps to make it easier to do business in the country and to invest are also welcomed.

We hope that the Minister of Finance will also take the time to consider adjusting the Capital Gains Tax (CGT) and high-end property transfer duty rates to reignite the property market. The upper-end R5 million-plus price bands hold the propensity to generate significant property taxes and economic spin-off benefits.

In the meantime, the already active market sector in the low to mid-market price ranges to R1.8 million will now benefit from the transfer duty relief while it remains supported by the favourable mortgage lending climate.

We remain buoyed by the commitment to reform and steps being taken to cut expenditure and stabilise Eskom and the SOEs. The take-out from this year's SONA and budget though, is that there are no quick fixes and recovery will take time.

On the whole, it was a positive budget insofar as that was possible under the current circumstances. In view of the continued weak outlook for the economy, however, the property market looks set to remain under pressure.

Overall, price growth will therefore remain tight around the 4% range although sellers in the low to middle-income price ranges to about R1.5 million may see higher growth. Above that, it will be area dependent.

On the upside, we expect an increase in buyer activity as they adjust to the "new normal" for the economy and property market. Market conditions remain particularly favourable and it is easier to obtain mortgage loans and at higher rates, especially for first time buyers.

In the meantime as we adjust to the economic realities, the property market offers plenty of opportunities. Prices have bottomed out and there is no reason for buyers to wait any longer.