Thursday, February 12, 2009

National Budget 2009 - What's in it for the Builders?

One of the 5 key areas identified by the Minister is Infrastructural Spending. This amounts to R787 billion over a 3 year period.
  • R6.4 billion is to be devoted to Public Transport improvements. This will also assist tourism.
  • R4.1 billion to schools and clinics. More building opportunities.
  • R5.3 billion to Municipalities and Water Schemes. Dams, tanks, piping etc.
The State is engaging with the banking sector to improve cashflow for housing finance.
  • R45 billion is earmarked directly for low cost housing.
  • R13.2 billion is allocated to social grants. This will indirectly assist the small builder who will have more cash to spend on materials.
Capital Allowances are granted in respect of the following:
  • Building used in a process of manufacture.
  • Qualifying commercial buildings used mainly in the production of income (New building acquired by the taxpayer and improvements to existing buildings). For example, new administration buildings and warehouses not being part of the manufacturing premises, retail and office buildings may now qualify for a write-off.
  • Urban development zone buildings.
  • Environmental assets.
  • Specific assets (pipelines, transmission lines, railway lines).
  • Low cost residential housing (These allowances have been expanded and enhanced).
While the general economic environment is tough, the State’s commitment to building infrastructure and housing is certainly encouraging in these hard times.

Clive Hill
Financial Services Manager


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