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Boom rewards state

30 September 2004

With the growth in the property market revenue from transfer duties have shot up by more than 550 percent from a low of R90 million a month at the beginning of 1999 to about R600 million a month this year. The low coincided with the Asian financial crisis and high domestic interest rates, which touched 25.5 percent towards the end of 1998.

Logically this growth in transfer duties can be attributed to the huge increase in property values and volumes of properties traded in the middle- to higher-priced residential properties. Transfer duty has three advantages for the state: rising property prices reward the fiscus; conveyancers act as tax collectors with little effort from the government and the government gets "brownie points" for not taxing poorer property owners.

Article in Business Report

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