Welcome tax relief for housing

"Coupled with the recent announcement of a national housing subsidy, which assists those earning between R3 500 and R15 000 a month to obtain a subsidy of up to R83 000 to get housing finance, there needs to be a sustained focus on incentivising and providing much-needed housing for the lower income earners in South Africa."

The mention in the Budget of consideration to be given to a mortgage support facility is also encouraging news.

"The new Cities Support Programme, focused on improved spatial planning, public transport systems and management of infrastructure utilities in eight metropolitan authorities, is also good news, as is the attention given to reducing the economic impact on road users of the toll road system in Gauteng.

"Increasingly, homebuyers seek to live in areas within easy reach of transport to places of employment, in order to avoid the increasing effects of rising fuel costs, toll roads, traffic congestion and time wastage. It is regrettable that fuel taxes are to increase once again. This year the general fuel levy on petrol and diesel increases by 20 cents with effect from 4 April 2012 and, coupled with the additional Road Accident Fund levy, which has increased by 8 cents, this places a further burden on consumers who are already faced with high fuel costs and rapidly escalating electricity tariffs. This is against the backdrop of rising property rates faced by both existing and aspirant homeowners.

"There was however some tax relief for individuals and small businesses and the creation of special economic zones and tax relief for businesses investing in these zones, including support for employment and training expenses, is positive. Economic initiatives to foster economic growth through enhancing manufacturing competitiveness and industrial development and help job creation are also welcome. Further good news is that encouragement is to be given to retirement savings.

"There were few surprises in this year's Budget, however we would have hoped that attention would have been given to further reducing transfer duty payable by homebuyers, in order to help encourage home ownership - which in itself helps provide future financial security for homeowners.

"The housing market remains under pressure and, while interest rates remain historically low, a recovery in the market is expected to remain relatively muted for the remainder of this year. However, it is true that there is improved sentiment generally evident in the market and this includes developers who are demonstrating increased confidence in the residential property market. From a Pam Golding Property group perspective we have managed to achieve an increase in sales turnover of approximately 20%, compared with the past year, mainly through increasing market share," concludes Dr Golding.