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 would 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 will purchase property worth less than R750 000.
There will also be a relief on transfer duty for properties acquired up to R3 million.
“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 or 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
A 6 % transfer duty will be imposed on properties bought for R1 250 001 to R1 750 000
Properties bought for R1 750 001 to R3 million will see buyers paying 8 % in transfer duty.
A transfer duty of 11% will be charged for properties bought for R3 million and above.
UIF relief for taxpayers
Meanwhile, National Treasury has proposed a once-off relief on the Unemployment Insurance Fund (UIF) contributions for the 201516 financial year.
The proposal, Treasury said, comes after the fund accumulated a surplus of R72.3 billion during the 201314 financial year.
Despite the more generous benefits mandated by a legislative amendment in 2012, the UIF estimates that earmarked contributions will add R51.8 billion to its accumulated surplus over the next three years, the National Treasury said.
“While government considers longer-term reforms, it proposes once-off relief for UIF contributors in 201516. Workers and employers each contribute 1 % of the first R14 872 of an employee’s remuneration.
“This threshold will be lowered to R1 000 with no change in benefits.
“In effect, employees will pay only R10 in monthly UIF contributions – and employers the same amount per worker – putting about R15 billion back into the pockets of workers and businesses in 201516,” said Treasury.
Source : SAnews.gov.za