Real Estate Investor Magazine South Africa May/June 2015 | Page 52

FINANCE

Utilizing The eThekwini

UDZ
Tax Incentives Boost Durban
Commercial Buy-to-let Market

BY MEGAN DIENER

N

ational Treasury extended the Urban
Development Zone (UDZ) tax incentive last
year until March 2020.
This incentive (which falls under section 13 quat
of the Income Tax Act - No. 58 of 1962) regenerates
urban areas and business districts experiencing urban
decay by boosting capital investment in buildings in
UDZ areas.
Developers and investors can capitalise on this tax
write-off for construction or refurbishment costs of
commercial properties in UDZ zones, such as the
eThekwini Municipality in Durban.

“Developers and investors
can capitalise on this tax
write-off for construction
or refurbishment costs.”
The boundaries of the eThekwini UDZ area includes
Durban Point, Bell Street in the south through to
Shepstone Rd, Victoria Embankment, Alexandra
50

MAY 2015 SA Real Estate Investor

Street, Berea Road, Carters Avenue, Canongate Road,
Warwick Avenue, Centenary Road, Carlisle Road,
First Avenue, Stamford Hill Road, Croydon Road.
Walter Gilbert Road, Cobham Road, Old Fort Road,
NMR Avenue, Somtseu Road, Stanger Street, Argyle
Road, NMR Avenue and Walter Gilbert Road in the
north.
This incentive offers a tax deduction of 20% in the
first year, including an annual depreciation of 5% over
the next 16 years.
Tax is deducted from the property owner’s complete
tax bill. Accelerated depreciation will be counterbalanced by any other income (personal income tax)
including income received from the particular invested
building.
For significant savings, rental management scheme
benefits include:
• A well-established short and long term rental
market company to let and manage commercial
space from on-site office.
• Great investor returns in short-term corporate
letting market.
• UDZ Allowance available (effective 18% discount
on purchase price).
www.reimag.co.za