BDFM Online
Thursday, November 30, 2006
A CHANGE in the law enabling sectional-title property owners to benefit from tax incentives for refurbishments of areas designated for regeneration in Johannesburg is boosting investor interest, says Lebo Ramoreboli, project consultant for economic area regeneration.
Changes to the urban development zone tax incentive legislation also benefited investors who buy buildings in these areas, she said yesterday.
Ramoreboli said that since June, 41 projects with a combined value of R574m had been completed in Johannesburg as a result of the amendments.
"The cumulative total value of all projects registered since (law's) promulgation in October 2004 is R1,6bn.
"With this amendment, we are bound to attract more investors and accelerate growth that is sustainable and ensures benefits and opportunities are available to all."
The scheme is an urban renewal tax deduction launched by the treasury in 2003 and amended this year to encourage the refurbishment and construction of commercial and residential properties in major cities.
The amendment, gazetted in February, includes tax deductions for investors who redevelop or buy renovated buildings in SA's inner cities. For purchasers of refurbished buildings, or parts of renovated buildings, 30% of the purchase price is deemed to be the cost for depreciation under the legislation. For purchasers of new buildings, or parts thereof, 55% of the purchase price is deemed to be the cost.
Sectional-title owners had been excluded from the incentive and this was seen as a weakness as most of the areas selected consisted mainly of blocks of individually owned flats, rather than whole blocks owned by single landlords