Budget 2020 a boon for first-time homeowners, say experts

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In his Budget 2020 speech on Wednesday, Finance Minister Tito Mboweni announced that transfer duty will no longer apply to properties that cost R1 million or less.Previously the threshold was R900 000.The change significantly reduces the financial burden on those looking to enter the market, says Carl Coetzee, CEO of BetterBond.

“It’s encouraging for the economy at large too, as property investment serves as an important barometer for the fiscal health of a country,” he adds.Dr Andrew Golding, CE of the Pam Golding Property Group, agrees that some of the primary beneficiaries of Budget 2020 are first-time homeowners.

First-time buyers currently account for about half of all mortgages facilitated by ooba, and affordability has tended to dampen potential demand, explains Golding.The average price paid for a home by a first-time buyer broke the R1 million barrier for the first time ever at the beginning of the year – at R1 001 275.

Since affordability is currently a key driver in the residential property market, Golding expects Mboweni’s increase of the tax-free transfer duty threshold will help stimulate property transactions in the below R1 million price band.

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