In light of the upcoming annual budget speech, an open letter from a property industry player to Finance Minister Trevor Manuel has outlined some proposals to make home ownership more affordable.

These include the following Tips for Trevor:

· Increase exemption on transfer duty
· Abolish attorneys conveyancing monopoly
· Tax relief for mortgage payments

Simon Stockley, CEO of Integer Home Loans, says it is increasingly evident that ordinary South Africans are battling to get onto the property ladder and asked whether Manuel could consider increasing the exemption on transfer duty from R500k to at least R1m.

"This would assist prospective first-time buyers to enter into the property market and facilitate the widening affordability gap," says Stockley. "In addition, it will encourage activity at the bottom-end of the market."

Stockley asked whether Manuel could also help potential home owners by abolishing the monopoly attorneys hold on conveyancing procedures in SA. According to him this restriction is no longer valid and adds to the costs and inefficiencies in the property market.

In the same vein, he asked for some tax relief for mortgage payments. "The property market is beginning to falter and, as the backbone of the consumer sector, I would urge active intervention," he said.

Stockley commented that it was time for government to offer a tax rebate on monthly mortgage payments like other countries who have implemented this successfully. He said this move would address affordability issues, stimulate confidence in the sector and encourage home ownership – one way to entrench the middle class.

Finally, he requested a budget that reflects growth and job creation, as opposed to a morbid preoccupation with inflation.

"The country needs employment and I would rather see aggressive government intervention to stimulate the economy, even if this spending results in SA remaining outside of the targeted inflation range of 3% to 6%," he said.

For more information contact Simon Stockley on 083 276 0068 or send an email.

Readers' Comments
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I strongly support Simon, it is really difficult for people like me who would like to own a property because I don't qualify for a bond and also don't qualify for a RDP house reason. I earn more than R3,500 for RDP house and less R12k for a house bond. We are stuck in the middle and no one seems to cater us except just rent and we don't want to rent for the rest of our lives. - Siyabonga Lubede

For years now, as an immigrant from the UK I have wondered why there has not been Personal Tax relief on the interest portion of Home Loans.

This action would of course take money out of the Governments pocket but in fact would be more money for the average person to spent and therefore would actually grow the economy in all sectors not just the property sector and the extra VAT would go a long way towards filling the tax coffers along the way.

It worked well in Britain after WW2 when there was need for rapid growth. The phrase "you've never had it so good" as coined by the British Prime Minister in the late 50's and early 60's could well apply to South Africa in the next decade.

Go for it Trevor, get the blinkers off. - Mike Wormleighton

I believe the Government needs to seriously consider separating home loans from the interest rate link. Raise the interest rate on the purchase of all items other than houses. Even if they make the first R1m exempt from a raise in interest rates. Home rates should be fixed at a nominal rate. – Barry Donald

I grew up in SA and is still a South African with all my investments there, I am on a long-term sabbatical in the UK. I would recommend that in order to stimulate the housing market all these suggestions will work well, but we should also not let the inflation get out of control. I know many people will shoot me for what I am about to suggest, but I think we can do better by increasing the vat rate slightly and in turn reduce the interest rate slightly to balance things out.

I would also see a little bit more tax on fuel but more money spent on roads and maintenance. The extra money paid on the fuel will be saved by all the tyres that needs replacing, the lives saved and the additional jobs it will create.

Well no system will suit everybody and the best we can do is try and if we don't succeed try again until we find a healthy balance to suit everyone in this diverse country.

PS. If we stop trading on Sundays as we did in the 80's, perhaps God will bless our country and things will return to normal. – Carel Struwig

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