Property tax with regards to the budget

The 2006 calendar year has started with many positive signs that the economy will continue on its growth path.

An important factor to determine this is how the property market is performing.

Of course, with increased pressure for property from the lower to middle income earners this should be the market to perform more strongly than expensive properties.

Trevor Manuel’s budget clearly helps those involved in property sales.

It is a well balanced budget. The most notable benefit to those involved in property sales is the lifting of the transfer duty threshold to R 500 000-00.

The allowable gain or loss on the disposal of a capital asset has been increased to R 1 500 000-00.

Interestingly enough the basic deduction for estate duty purposes has been increased to R 2 500 000-00 and in the case of estate duty and donations tax for individual donations exceeding the R 60 000-00 annual allowance, the rate is 20%.

In our view the budget reaffirms the Governments wish to place assets in the hands of individuals rather than companies or trusts.