Give tax relief on homeloan interest

2013-02-20 12:31
buy, house, car, mortgage, saving

Fin24 user Mike Wormleighton writes:

Dear Mr Gordhan,

Setting our goals for this year and in reality the next decade, they have to be: 

1. Increase job availability. 

2. Increase tax revenues to allow good spending on infrastructure that is sorely needed in the country as a whole and in particular for the poor and underprivileged.

3. Reduce crime.

In all honesty these goals are not separate nor difficult to realise.

One simple measure would secure the means to grow the economy and provide success in achieving all of the above goals.

Simply put, give personal tax relief on the interest portion of mortgage bonds paid within a given tax year.

This would create a greater amount of disposable income for most families who are involved in buying their own property and give incentive to do so in the case of people who have not yet bought their own property.

The extra disposable income in our society would be spent in both the building industry and home improvement industries,, and this would increase spending in just about all of the associated industries. 

This would increase demand and therefore job opportunities.

The tax lost through the rebate would soon be made up with the increased amount of VAT received by the government, and also by the income tax from the increased employment this would generate.

This is not new! 

It is a system that was used in the 1950s in Post World War II Britain to get the ravaged infrastructure rebuilt, and also to get the economy moving after six years of war and austerity.

Though there is no comparison between WW2 and current South Africa, there are a lot of similar needs and in reality what worked in post war Britain could and should work in dear old SA.

Trusting that you will give this suggestion some consideration and hopefully be able to achieve President Zuma's declared desire to generate five million new jobs.

Best regards,
Mike Wormleighton

 - Fin24

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