Sectional title the key to sustainable housing
12 June 2006
Building more shoebox houses on large tracts of land at the edges of towns and cities will not realise government's ideal of sustainable human settlements where residents can live, work, rest and play.
The Department of Housing should rather spend its budget - or a large part of it - on creating viable sectional title developments or redevelopments in inner city suburbs and upgrading existing infrastructure, says Berry Everitt, MD of the Chas Everitt International property group.
"The banks should also direct most of the R42-million they have earmarked for low-income homebuyers to help finance the purchase of sectional title units in existing suburbs, rather than help to create new "locations".
"They should take note that sectional title living in flats, townhouses or clusters - whatever these units are called in other countries - is rapidly gaining popularity worldwide, and not only because these units tend to be cheaper than freehold homes," he says.
"Around the world, many affluent buyers are now also choosing sectional
title / group/ multi-family housing - especially in older suburbs that are being
renewed or brownfields areas - because it makes better use of land and resources,
involves less maintenance, provides better security and
significantly cuts commuting time and costs."
Everitt says sectional title developments, whether in CBDs or older suburbs,
are also conducive to establishing inclusive communities - one of the goals
of the Department of Housing's sustainable human settlement plan - as they can
incorporate a mixture of unit types and sizes, as well as shared
amenities.
However, some creative tax relief may be required to really boost sectional
title living in SA. With VAT currently payable on newly-built homes, every R100
000 spent on a new flat or townhouse, for example, is only buying R87 720 worth
of home. On the other hand, the new transfer duty dispensation announced in
this year's Budget means that existing homes costing less than
R500 000 attract no tax.
"There is thus likely to be increased demand for existing sectional title units, and this ties in with the tax incentives recently announced for inner city redevelopment. However, new stock also needs to be created in the interests of affordability, and more tax concessions may be required to fuel buyer and developer interest."
Issued by Chas Everitt International
For further information call Brenda Smith at
Chas Everitt International Bryanston on 011 463 2033
or visit www.chaseveritt.com