VAT backtrack offers some relief, for now

South Africans heaved a sigh of relief when the proposed value-added tax (VAT) hike was cancelled.

- PROPERTY WRITER

In a significant policy reversal, the proposed VAT increase from 15% to 15.5% which was scheduled to come into effect on Thursday May 1 has officially been cancelled.

Following extensive parliamentary discussions and consultations, the Minister of Finance Enoch Godongwana confirmed that the rate will remain at 15%, offering a reprieve to South Africans already navigating a tight economic climate.

"This is a huge relief for everyone in the property space," says Roger Lotz, franchisee at Rawson Properties Helderberg and Somerset West Rentals.

"We'd been preparing our clients for a small but meaningful increase in transaction and management costs.

"The decision to cancel the VAT hike means we can press pause on those adjustments - for now."

While the announcement provides immediate financial relief, it also comes with some important caveats for property buyers, sellers, landlords, and homeowners.

Buyers: budgeting just got easier

For those in the market to buy property - especially in new developments where VAT is included in the price - the cancellation translates directly to savings.