South African homeowners who have been battling the impact of loadshedding have been offered some much-needed relief following the 2023 Budget Speech. Minister of Finance Enoch Godongwana shared plans to introduce a new tax incentive for individuals to install rooftop solar panels to reduce pressure on the grid and help ease loadshedding.
He shared that individuals who install rooftop solar panels from 1 March 2023 will be able to claim a rebate of 25% of the cost of the panels, to a maximum of R15 000. This rebate is only available for one year and can be used to reduce their tax liability in the 2023/24 tax year.
Rhys Dyer, CEO of ooba Group, a bond originator, has welcomed the news.
“The local property market has been adversely impacted by the multiple interest rate hikes and loadshedding in recent months and homeowners are long overdue for some good news. Investing in renewable energy such as solar power is a good way to build equity in your home and the addition of this new tax incentive should benefit owners greatly,” he said.
“As this incentive is available for a limited one-year period, homeowners will need to act quickly in order to maximise the financial return on their solar investment. The good news is that we’re seeing more and more solar offerings in the market coupled with finance solutions for homeowners, thus increasing the accessibility of solar solutions for the average consumer. Ooba has partnered with a number of credible solar providers and is able to provide its customers with home solar solutions as well as financing options for solar products,” he said.
The residential property market received a further boost following the Minister’s announcement that the bracket for property transfer duty has been increased by 10%, making properties purchased at R1.1m or less, exempt from transfer duty payment.
“This is particularly encouraging for the first-time homebuyer segment,” says Dyer. “Our stats show that the volume of first-time buyer applications has decreased by 13% from the May 2020 peak, resulting from a reaction to inflationary pressures. With ooba’s average purchase price in January 2023 for first-time homebuyers standing at R1.3m, we expect that many would-be buyers will take advantage of the raised transfer duty threshold and enter the market,” he said.