Presentation on theme: "THE URBAN DEVELOPMENT ZONE TAX INCENTIVE Presented by Brian Dlabazana FromSPM."— Presentation transcript:
THE URBAN DEVELOPMENT ZONE TAX INCENTIVE Presented by Brian Dlabazana FromSPM
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? It covers construction costs. Costs incurred by an investor in demolishing or destroying any existing building. These costs include provision for the following amenities A.Power B.Water C.Sewerage D.Access or parking for the building E.Drainage F.Security for the building G.Means of waste disposal H.Sidewalks and I.Landscaping ( including earthworks, greenery and irrigation)
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. SUBMITTION REQUIREMENTS
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 /6211