UDZ TAX INCENTIVE AND FASHION LOFTS What is the UDZ tax incentive and how can I benefit from it? The Urban Development Zone (UDZ) tax incentive is aimed at encouraging inner city development across South Africa. Any taxpaying, property owning individual or entity can claim the tax benefits of the UDZ incentive, if they fall within the UDZ boundaries. The stunning Fashion Lofts developed by Aengus Lifestyle Properties, falls within an Urban Development Zone. The result of this is that investors can qualify for the accompanying tax incentives that are offered by government in this particular district. The incentive takes the form of a tax allowance that covers an accelerated depreciation of investment made in either the refurbishment of an existing property or the creation of new developments within the inner city. This falls over a period of either five, or seventeen years. In the past, sectional title units were not entitled to a tax deduction, however due to the increasing demand from both the private sector and municipalities it was decided to amend the act to include such units. These amendments have been applicable since November 2005 and allow up to 30% of the purchase price as a deduction over a five year period. Please note, although Fashion Lofts falls within the UDZ, it is up to the investor to submit the requisite information to SARS at the end of the tax year. HOW THE PROCESS WORKS A developer needs to obtain a certificate from the Joburg Council which certifies that the property does in fact fall inside the UDZ boundaries. On completion of the units, the developer must then obtain a certificate of occupation from the Joburg Council. The sectional title owner must then accompany the following document with their next tax return: Zone certificate Occupational certificate Deed of sale Development agreement Aengus Lifestyle Properties cannot guarantee or be held responsible for the above information. For further detail on the UDZ please contact your accountant/auditor or local SARS office.
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