There is a discrepancy between the supply of reasonably priced rental accommodation and the demand for it in South Africa – far more people are looking to rent than to buy.
In the early 1980s, to incentivise private-sector engagement in low-cost housing, government introduced legislation that allows developers, under certain conditions, to deduct building costs from tax.
The legislation was confirmed and enhanced in the Revenue Laws Amendment Bill 80 of 2008's Article 13. The enhancements also partially extend the tax opportunity to buyers of new or unused residential property that is bought to let.
The effect of the Article 13 legislation
This means that developers who qualify are able to write off the cost of all new and unused residential units they erect at an annual rate of 5%. The write-off applies also to the cost of improvements to existing buildings.
Purchasers of residential units are also entitled to the write-off up to 55% of the acquisition price.
Usefully, this allowance is not apportioned for part of year so even if a building is acquired on the last day of a tax year, the full 5% may be claimed as a deduction.
How do you qualify for this tax break?
What is The Visual Property Club?
The Visual Property Club comprises a group of investors who have responded to this uniquely powerful wealth-creation tax incentive. Fundamentally, this involves tax-friendly investments that generate an income while simultaneously building an appreciating asset base.
For its members, the Club manages the time-expensive and bureaucratically complex aspects of tax-efficient property development.
Investor benefits:
Tax benefits:
The Visual Property Club provides a total turnkey solution to its investors.
For a personal consultation and reviwe of your potential tax savings contact Roelf van der Merwe: on: +27 (0)21 976 4663 or at: roelf@visualinternational.co.za or roelf@vrprop.co.za
For more information visit The Visual Property Club website »