While the tax proposals regime announced in the 2015 National Budget signalled difficult times ahead, Finance Minister Nhlanhla Nene also announced new tax breaks that will ease the burden on the already strained working and middle class income earners.
While the super-rich will pay more on property transfer pricing, the Minister delivered good news to citizens who purchase property worth less than R750 000.
“The rates and brackets for transfer duties on the sale of property will be adjusted to provide relief to middle-income households.
"The new rates eliminate transfer duty on properties below R750 000, while the rate on properties above R2.25 million will increase,” he said.
The new rates will only apply to property acquired on or after 1 March 2015 by any person, including companies, close corporations and trusts.
In summary, the following was announced in the Budget:
A 0% transfer duty rate will be charged for a property acquired for less than R750 000; A 3% transfer duty rate will be charged for property worth between R750 001 to R1 250 000; For properties from R1 250 001 to R1 750 000 - R15 000 plus 6% of the property value above R1 250 000; Properties between R1 750 001 and R2 250 000 - R45 000 plus 8% of the property value above R1 750 000; Properties over R2 250 001 - R85 000 plus 11% of the value above R2 250 000.