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SARS Tax Refund For Property Investors

SARS Sexy Tax Benefit for Property Investors

Everyone knows that creating a financial bolthole 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?

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.

The 4 qualifying criteria are as follows:

  1. The unit must be new and unused, so buying direct from a developer qualifies.
  2. Unit must be solely for the trade of the taxpayer, i.e. it must be a rental unit.
  3. 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.
  4. The unit must be in sunny South Africa.

Stephan van Schalkwyk, Director of Accounting firm De Wet 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
The Base Apartments Randburg

The Base Apartments is a new residential development launching in Ferndale, Randburg. It offers 1-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 1 bed apartments in Ferndale is expected to continue unabated for the foreseeable future and rentals of around R6000 per month, excluding utilities, should be comfortably achievable as completion is expected in the 3rd Quarter of 2021. Levies are low and rent to value is around 1% of the purchase price, so the apartments are virtually paying for themselves from day one”,

says Ryan van Heerden, CEO & founder of Ryan’s Realty, Development Specialists.

The Base is one block from SARS Randburg (just in case you need help getting your SEX13 rebate submitted) and 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 2 minutes drive and a 15 minute drive from Sandton, Bryanston or Rosebank. Making it the perfect base for young professionals.

The Base Apartments also boasts the latest in technology and design trends with Smart3 Living. These Smart3 Homes have 3 distinct forward-thinking ingredients that give them the desirable edge above other homes:

1. Tech
The units will be fibre ready and have keyless access. It’s a plug-and-play world.

2. Efficiency
Efficient price: pay less, get more. Efficient usage: with high quality, low consumption products as standard.

3. Design
Clever design utilises space and natural light effectively.

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.

The Base Apartment Randburg lounge
The Base Apartment Randburg kitchen
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