The growing tax burden for the wealthy is a concern‚ says businessman Samuel Seeff.
“While the increase in taxation of the wealthy in the form of a new top marginal bracket (45% for annual earnings of R1.5m-plus) and higher dividend tax (up from 15% to 20%) may unfortunately be necessary‚ we are concerned at the growing burden at the top end‚” the chairman of the Seeff property group said.
“Globally‚ we have seen that burdening wealthy citizens with higher tax does not create more government income‚ but tends to have the opposite effect. These are generally your entrepreneurs‚ business owners‚ captains of industry and job creators. Higher taxes is likely to see more wealth leaving the country.
“It may potentially also take the liquidity out of the top end of the property market. As we have seen over the last year‚ the higher transfer duty and Capital Gains Tax impacted sales negatively. The negative sentiment also meant that despite a weak rand‚ fewer foreigners bought property despite the fact that we welcomed record numbers of foreign visitors over the summer‚” said Seeff.
He was appreciative of the raising of the threshold for transfer duty exemption from R750‚000 to R900‚000 effective from March 1‚ saying‚ “this is the most positive and welcome outcome. It will certainly enable more first time home buyers to get onto the property ladder“.
“That said‚ the cost of home ownership remains high with home owners burdened with rising property taxes‚ sectional title levies and ever-higher basic utility costs.”
Seeff said what the country actually needed was growth and less wastage.
“Tax payers also need to see a government that is firmer on cutting corruption and wasteful expenditure. That surely may well alleviate the need for these tax hikes.
“We need a more positive outlook and economic growth. That will broaden the tax base and generate more income for government.
“...Nonetheless‚ we remain upbeat that the (property) market should hold up well for the time being... Hopefully the higher exemption threshold will boost demand from first time buyers.”
Budget 2017: Overburdening wealthy South Africans could hurt economy - Seeff
“While the increase in taxation of the wealthy in the form of a new top marginal bracket (45% for annual earnings of R1.5m-plus) and higher dividend tax (up from 15% to 20%) may unfortunately be necessary‚ we are concerned at the growing burden at the top end‚” the chairman of the Seeff property group said.
“Globally‚ we have seen that burdening wealthy citizens with higher tax does not create more government income‚ but tends to have the opposite effect. These are generally your entrepreneurs‚ business owners‚ captains of industry and job creators. Higher taxes is likely to see more wealth leaving the country.
“It may potentially also take the liquidity out of the top end of the property market. As we have seen over the last year‚ the higher transfer duty and Capital Gains Tax impacted sales negatively. The negative sentiment also meant that despite a weak rand‚ fewer foreigners bought property despite the fact that we welcomed record numbers of foreign visitors over the summer‚” said Seeff.
He was appreciative of the raising of the threshold for transfer duty exemption from R750‚000 to R900‚000 effective from March 1‚ saying‚ “this is the most positive and welcome outcome. It will certainly enable more first time home buyers to get onto the property ladder“.
“That said‚ the cost of home ownership remains high with home owners burdened with rising property taxes‚ sectional title levies and ever-higher basic utility costs.”
Seeff said what the country actually needed was growth and less wastage.
“Tax payers also need to see a government that is firmer on cutting corruption and wasteful expenditure. That surely may well alleviate the need for these tax hikes.
“We need a more positive outlook and economic growth. That will broaden the tax base and generate more income for government.
“...Nonetheless‚ we remain upbeat that the (property) market should hold up well for the time being... Hopefully the higher exemption threshold will boost demand from first time buyers.”
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