Real Estate Investor Magazine South Africa May/ June 2020 | Page 20

LEGAL SARS sexy tax benefit for property investors ON S HOW SATURDAYS 11:00 - 16:00 How to qualify for Section 13 SEX E veryone knows that creating a financial bolbolt holethole through property investment also enables you to generate wealth and create a financial legacy for your children to enjoy. Property investment is, comparatively, a more robust financial move than plunging your money into the stock market or similarly volatile options. But did you know that SARS has a sexy tax benefit for property investors? 1. 2. 3. 4. QUALIFYING CRITERIA The unit must be new and unused, so buying direct from a developer qualifies. Unit must be solely for the trade of the taxpayer, i.e. it must be a rental unit. The taxpayer (or entity could be a trust or company) must own at least 5 rental units, all of which don’t need to be purchased all at once, but the allowance only kicks in once the 5th unit is acquired. The unit must be in sunny South Africa. Director of Accounting firm De Wet van Schalkwyk, Stephan van Schalkwyk explains: “Say you purchase 5 units @ R600,000 = R3,000,000 purchase value. SARS will allow 55% of the acquisition cost as an allowance against taxable income. So R3,000,000 x 55% = R1,650,000 that SARS will allow you as a tax deduction over 20 years. This totals R82,500 per annum for 20 years. So, if you are at the marginal income tax rate of 45%, then R37,125 is the tax saving every year…for 20 years.” The Base Apartments ticks all the boxes The Base Apartments is a new residential development in Ferndale, Randburg. It offers one-bedroom apartments from R569,000, making it the perfect buy for investors looking for solid cashflow and capital growth, as well as the opportunity to benefit from the SEX13 tax deduction. "The current high demand for one bed apartments in Ferndale is expected to continue unabated for the foreseeable future and rentals of around R5750 per month, excluding utilities, should be comfortably achievable as completion is expected in the 4th Quarter of 2021. Levies are low and rent to value is around 1% of the purchase price, so the apartments 18 MAY/JUNE 2020 SA Real Estate Investor Magazine are virtually paying for themselves from day one,” says CEO & founder of Ryan’s Realty, Development Specialists, Ryan van Heerden. FERNDALE | RANDBURG An added incentive is the 12-month rental guarantee offered to investors, making it an exceptionally secure investment. The unique “Wallet” system also ensures that prepaid water & electricity are the last items to be settled if rent is short paid by a tenant. Location, location, location! The Base is surrounded by a multitude of small to large businesses, corporations, universities, gyms, colleges, hospitals, plenty of shopping centres and night life opportunities. The brand new, state- of-the-art shopping mall, Ferndale on Republic, is just two minutes' drive away. While Sandton, Bryanston and Rosebank is just a 15-minute drive, making it the perfect "Base" for young professionals, from which they can work, live and play. The Base Apartments boast the latest in technology and design trends with Smart3 Living. These modern apartments feature state-of-the-art keyless entry, high quality energy efficient products and they will be Smart Home ready and fibre connected. So, if you are looking for solid cashflow, capital growth, and a sexy tax deduction, The Base ticks all the boxes. Contact Ryans Realty today for more information. Contact Details: Ryan van Heerden, CEO & founder of Ryan’s Realty, Development Specialists [phone] [email protected] www.ryansrealty.co.za www.thebase.joburg SOURCE Ryan’s Realty Property demand in Randburg is high due to the good value for money and accessibility to the Sandton CBD. 1 SMART HOME READY 2 ENERGY EFFICIENT 3 FIBRE CONNECTED 1 BED R569k What is Section 13 SEX of the Income Tax Act? Basically, SARS wants to encourage investment and the provision of rental homes into the market, so SEX13 allows you to decrease your taxable income. A buy-to-let investor can claim an allowance of 55% of the purchase price. N O T R A N S F E R COSTS Occupation expected end 2021. Only R10,000 to secure. C O N TA C T U S N O W 082 567 0735 [email protected] www.thebase.joburg If you are looking for solid cashflow, capital growth, and a sexy tax deduction, The Base ticks all the boxes. Contact us today for your Info Pack. 1 YEAR RENTAL GUARANTEE SEX13 TAX BENEFIT LOW LEVIES T&Cs Apply. Contact us for more info.