Drum speaks to experts in the field who explain what you need to know about this new tax year, ending 29 February 2024.
TRANSFER DUTIES
There’s some good news if you are buying a property that’s R1,1 million or less. “The transfer duty exemption threshold has been increased by 10% to R1,1 million. This means that no transfer duties are payable on properties below R1.1 million – a reprieve for those entering the property market,” Farzana Botha, Segment Solutions Manager at Sanlam Savings, tells Drum.
SOLAR PANEL INCENTIVE
Finance Minister Enoch Godongwana’s 2023 Budget Speech has gotten many excited about the tax deductions households and businesses can look forward to if they opt for renewables.
“I am pleased to announce two tax measures to encourage businesses and individuals to invest in renewable energy and increase electricity generation,” he said on Wednesday, 22 February 2023.
“As announced by the President, we will also introduce a new tax incentive for individuals to install rooftop solar panels to reduce pressure on the grid and help ease loadshedding. 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, up to a maximum of R15 000. This can be used to reduce their tax liability in the 2023/24 tax year. This incentive will be available for one year.”
Ester Ochse, Product Head, FNB Integrated Advice, explains how the solar incentive will work. “An incentive has been given to consumers that install solar panels from 1 March 2023 until end February 2024.
“This is in the form of a rebate of 25% of new and unused solar panels up to a maximum of R15 000. This R15 000 can be used to offset the personal tax liability for the 23/24 financial year. That means that if a person puts in a solar panel to the value of R10 000 they can use the rebate of R2 500 to reduce their tax liability for that tax year.
“It is important to note that this is for panels only, not for batteries and inverters.”
Read more | What you need to know about the real cost of solar and dodgy panel installers or supplier
PERSONAL INCOME TAX
The annual tax-free threshold percentage increase for a person under the age of 65, has been adjusted to cater for inflation and now if a person is below the age of 65 and earn below R95 750 there is no personal tax payable, explains Este.
“For the personal income tax component and to ensure that these brackets keep pace with inflation, the brackets have also had an increase of 4,9% this means that at the end of March there will be slightly more income paid into salaried individual bank accounts. This can then be used to pay off debt or save for an emergency.”
CAPITAL GAINS
This remains the same. “Tax on Capital Gains has not changed. The exclusion is R40K. Capital gains above R40K are taxed at 18% for individuals,” says Samukelo Zwane, Head of Product at FNB Wealth and Investments.
Read more | Is the housing boom for first-time homeowners in SA over and when will it be a buyers’ market again?
‘SIN’ TAXES
There is a 4,9% increase in excise duties on alcohol and tobacco.
TAX ON INTEREST EARNED BY AN INDIVIDUAL
This stays unchanged, which means “interest from a South African source, earned by any natural person under 65 years of age, up to R23 800 per annum, and persons 65 and older, up to R34 500 per annum, is exempt from income tax,” according to SARS.
TAX ON SHARES/DIVIDENDS EARNED BY AN INDIVIDUAL
“The Dividend tax has not changed. The dividend withholding tax is still 18% for individuals,” says Samukelo.
Samukelo Zwane, Head of Product at FNB Wealth and Investments explains what Drum readers need to know about tax-free investments, which were introduced as an incentive in 2015 to encourage individuals in South Africa to save more.
The total lifetime tax-free contribution per individual remains at R500 000 and the tax on interest has not changed.
“The interest exemption is still R34 500 per annum. Interest above the R34 500 [threshold] is taxed at the individual person’s tax bracket. The individual tax brackets have been adjusted upwards by 4,5% as inflationary adjustment.”
Should the annual tax-free saving contribution threshold be exceeded, a 40% penalty on the over-contributed amount applies, he says.
“The tax payable on returns in unit trusts has not change from the last tax year to this tax year,” he adds.
For more information: Download the SARS Budget 2023 Tax Guide.
