In a positive turn of events, the National Treasury announced in a media statement that it intends to reverse the proposed VAT rate increase outlined in the March Budget Speech.
Following extensive consultations with political parties and a careful consideration of parliamentary committees’ recommendations, Finance Minister Godongwana has proposed maintaining the standard VAT rate at 15% from 1st May 2025.
The announcement, which comes one day after the DA’s urgent application to interdict the staggered VAT hike was heard in the Western Cape High Court, will no doubt be welcomed by various sectors, including the property industry.
The news is especially positive for developers and prospective purchasers. As VAT is included in the purchase price of new builds sold by VAT-registered developers, a VAT increase would have slightly raised the overall cost of purchasing such properties and forced developers to reassess their pricing models. While the direct cost of purchasing property subject to transfer duty would not have increased with a VAT adjustment, the associated transactional costs — including conveyancing fees — would have risen marginally.
While VAT and other rates may fluctuate, STBB remains committed to your transaction, however big or small.
For further information or to consult with one of our property law specialists, contact us at info@stbb.co.za today. Let us handle the legal intricacies for you.
