will manuel cut transfer duty?
6 February 2007

The transfer duty on property is expected to be cut further when Finance Minister Trevor Manuel unveils the 2007/2008 National Budget on 21 February, managing executive of Absa home loans, Gavin Opperman, said in a statement on Monday.

"From a property market point of view, the Budget has become increasingly important in recent years, as transfer duty on property has been reduced for the five successive years up to the 2006/07 Budget," the statement said.

Adjustments resulted in the maximum value of a property exempted from transfer duty being increased from R70 000 in 2001/02 to R500 000 in 2006/07.

According to Opperman, government had lowered the transfer duty on property in order to make homeownership more affordable, especially for the lower-income groups, taking into account the sharp increase in house prices in recent years and a greater focus on housing delivery at the bottom-end of the market.  His expectation of a further cut in transfer duty comes against the backdrop of house price growth of more than 15 percent last year.

"Such a step will contribute to the further broadening of homeownership in the country, especially at a time when interest rates are on the rise and the affordability of housing is under pressure," he asserted.

In addition to the substantial cuts in transfer duty on property since 2001; mortgage loan products specifically developed for low-income earners by banks and government's housing subsidy scheme for low-income, first-time homebuyers were giving much-needed support to the lower-end of the housing market, Opperman concluded.

I-Net Bridge, www.business.iafrica.com