GOVERNMENT IS ENCOURAGING THE SUPPLY OF RESIDENTIAL ACCOMMODATION THROUGH TAX BREAKS
WE ALL know that SARS does not offer much in terms of giving us money back. Well, a little-known fact is that they have a tax incentive called Section 13sex, where they offer us a significant tax benefit on residential property under the Income Tax Act 58 of 1962.
How does Section 13sex work, you ask? This incentive offers purchasers of residential units to write off a percentage of the cost of buildings acquired after 21 October 2008. SARS would like to incentivise the investor to purchase investment properties to supply accommodation, and in return give them a percentage back of the purchase price.
Now down to the nitty-gritty. Certain requirements need to be met to qualify for this incentive, herewith is a short breakdown:
• The investor needs to own at least 5 residential properties. They do not have to be purchased at the same time, although the tax incentive will only come into play once the 5th property has been acquired.
• All 5 these units need to be used for rental purposes—this means that the owner and their family cannot stay in these units themselves.
• All units must be in South Africa, as this incentive will only apply to a South African taxpayer.
• These properties need to be new and unused, which means that …
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