SEASONS 4 ECO ESTATE, HEIDERAND, MOSSEL BAY

Savvy & Smart

Real Estate Investorsbe wise and legally leverage the Income Tax Act in your favour. SARS will pay you millions of rand back from your capital invested into your buy-to-let property portfolios and make SARS an active role-player in your property investments, SARS is encouraging buy-to-let investments. By implementing the benefits of Section 13 Sect of the Income Tax Act., by applying your time and investment strategy into activities that produce jobs, housing, and grow the economy, SARS will reward you through excellent tax benefit incentive. SARS is encouraging the development of affordable housing in South Africa which in turn helps grow the economy. SARS will make it worth your while by giving you money back – a lot of money.

The four key requirements to qualify for the SARS sec 13sex tax incentive:

• The unit must be new or unused (including a self-contained apartment) and mainly used for residential purposes. So, no existing or second-hand properties will qualify for the tax incentive.
• The unit must be used solely for the trade of the taxpayer – in other words, the taxpayer may not live in the property as their primary residence. This means it’s ideal for buy-to-let investors to rent it out to tenants.
• The taxpayer must own at least five residential units, all of which must be used for the taxpayer’s trade. (Please note, you don’t need to buy all five simultaneously.)
• The units must be in South Africa.

A practical example

For every five properties investors buy, SARS allows a minimum of 55% of the purchase price as a tax deduction.

So, if you were to buy five properties, for a million rand each:

• 5 x R1 million properties = R5m x 55% = R2.75 million that SARS will allow you as tax deduction to reduce your tax liability.
• This equates to an annual tax allowance for 20 years of R137,500, taxed at the 45% income marginal tax rate equals R61,875 a year (or effectively R5,156 a month) that SARS will help you to gain every year for 20 years.

Be a smart investor with SKYE wealth creation through property practitioners and use this incentive to build your property portfolio effectively, tax-free, until retirement.

Apply this stackable tax effect by using the allowable deductions, concessions, rebates and incentives in a strategic way to reduce your tax you will create a compounding tax effect in your portfolio and build substantial wealth at the same time.

SARS is there to make you rich in real estate, especially if you follow the rules of the rich.