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Budget 2007   Article Date :27 Feb 2007 Items of interest to Estate Agents Sources:Budget Speech 2007/Budget Tax Guide 2007/8 CAPITAL GAINS TAX The annual exclusion, i.e. amount deductible from a capital gain before calculating the tax on it, has been increased from R12 500 to R15 000. (This is for natural persons - no mention of any change in the exclusion for deceased estates). COMPANY AND SHAREHOLDER TAXES Secondary tax on companies is to be replaced in October 2007 by a tax on the shareholders in the companies. They will be individually taxed on the dividends which they receive, the tax rate being 10%. Capital gains tax will in future be levied on the proceeds of the sale of all shares that have been held for three years or longer. SOCIAL SECURITY SCHEME Government proposes to introduce a social security scheme by 2010, "to provide improved unemployment insurance, disability and death benefits targeted at the income needs of dependants, and a standard retirement savings arrangement". It will be financed by a social security tax collected in individual accounts in the name of every contributor. A wage subsidy will be introduced for those whose earnings fall below the income tax threshold (which has been raised to R43 000). Participation will be compulsory for all employees, and self-employed individuals will also be included. STAMP DUTY Property leases with a duration of less than five years will be exempt from stamp duty. The effective date is 1 April 2007. This applies to all types of property leases. Please note: We have received an update from SARS as follow: 14 March 2007 You will be aware that the Minister announced in his budget speech that leases under five years will not attract any stamp duty. We have just received communication from Head Office stating that the effective date of the changes has changed from the 1 April 2007 to 1 June 2007 and will be applicable on all agreements executed on or after that date. Please accept our apologies for any inconvenience caused. TAX DEPRECIATION ALLOWANCES Tax depreciation allowances for economic wear and tear of newly constructed or upgraded commercial buildings are to be introduced. A 20-year write-off period is envisaged. Depreciation allowances are also proposed for environmental capital structures such as dams and tanks. TRANSFER DUTY For the first time in several years, no change has been made to transfer duty. It remains at the rates introduced in 2006. CLICK HERE TO RETURN TO THE MAIN NEWS PAGE