A NEW HORIZON IS COMING

The Horizon is located within a designated Cape Town Urban Development Zone (UDZ), a SARS-administered incentive aimed at encouraging new residential and commercial investment in specific inner-city areas. Under the current framework, qualifying buyers may be able to claim an income tax allowance, effectively spreading part of the purchase cost as a deduction over eleven years.
In broad terms, up to 55% of the purchase price of a qualifying apartment can be treated as an allowance base. This is then written off at 20% in the first year and 8% per year over the following ten years. If the property is sold for an amount equal to or greater than cost, the allowance may be recouped for tax purposes at the time of sale, resulting in a deferral of tax while the property is held.
Illustrative example (for concept only):
On an apartment costing R2 million, a purchaser might claim a total allowance of R1,1 million over eleven years, achieved through a 20% deduction in year one and 8% in each of the following ten years.

Investors may also benefit from Section 13sex of the Income Tax Act, which can offer substantial tax relief to qualifying taxpayers who own five or more new residential rental units. Under this regime, up to 55% of the combined purchase price of those units may be treated as a deemed cost, with 5% of that amount deductible annually over twenty years.
Illustrative example (for concept only):

Purchase five qualifying apartments with a combined purchase price of R19 868 075
Apply a launch discount of R500 000 (R100 000 per unit)
Final purchase price becomes R19 368 075
Deemed purchase price at 55% is R10 652 441
5% of this deemed price may be claimed as a deduction each year
This creates an annual tax deduction of roughly R532 622 for 20 years, resulting in a total tax write-off equal to the deemed purchase price of R10 652 441 over the full period.