THE URBAN
DEVELOPMENT ZONE
TAX INCENTIVE
Presented by
Brian Dlabazana
From
SPM
INTRODUCTION
• In 2003, the Minister of Finance. Trevor Manual
introduced a tax incentive an incentive to encourage
investment in areas with high population carrying
capacity, central business district or inner city
environments and areas with developed urban
transport infrastructure.
• This incentive has been effected by the insertion of
section 13 quart into the act.
• The tax incentives, where claimed, reduces the
taxable income of taxpayer.
PURPOSE
• The UDZ seeks to attract development to areas
where interest would otherwise be lacking.
• The UDZ tax incentive encourages the
refurbishment and construction of both commercial
and residential buildings in designated decaying
inner city areas within selected municipalities.
• The incentive also supports the objectives of the
department of housing’s comprehensive plan for the
development of sustainable human settlement by
encouraging private investment in affordable rental
housing in the inner city
• It provides possible catalyst for public private
partnership in a mixed-used development
that provides social facilities that are
integrated into new commercial and
residential developments.
• The incentive translates into considerable
financial benefit for the investors, especially
for refurbishing existing buildings.
WHO IS ELIGIBLE FOR THE
INCENTIVE?
• Any investor( including individuals,
companies, close corporation and trusts as
well as partners in a partnership) is eligible
for the incentive once the following
conditions are met. Firstly, the investor must
improve an existing building or erect or erect
or construct a new building within the urban
development zone. Hence, an investor
purchasing a pre- constructed building or
improvements is eligible for the incentive. In
other words the investor must add value to
the zone.
• Secondly, the investor must use the
improved or new building solely for
purposes of the investor’s trade.
• The trade can be of any kind.
WHAT COSTS DOES THE
ALLOWANCE COVER?
•
•
•
A.
B.
C.
D.
E.
F.
G.
H.
I.
It covers construction costs.
Costs incurred by an investor in demolishing or destroying
any existing building.
These costs include provision for the following amenities
Power
Water
Sewerage
Access or parking for the building
Drainage
Security for the building
Means of waste disposal
Sidewalks and
Landscaping ( including earthworks, greenery and irrigation)
SUBMITTION REQUIREMENTS
A UDZ location certificate from the
Municipality that the building is in
approved UDZ.
The nature/ particulars and costs of the
building operations as well as the costs
relating to any portion of the building for
which an occupancy certificate has
been grated.
CONCLUSION
• The urban Development Zone we see it as an activity if
embarked upon could improve the economic well-being and
quality of life. It encompasses the will to create and or retain
jobs.
• “yesterday is not ours to recover, but tomorrow is ours to win or
lose”
• Thanks
• For more information contact
• Brian Dlabazana
• Information assistant
• 053-8306492/6211