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Zane talks us through the important considerations when buying an investment property.
Zane De Decker unpacks an investment into Flyt Hospitality’s Section 12J Fund
Anuva Investments, South Africa’s first Section 12J company, have announced the launch of a new fund available, allowing for diversification from traditional 12J private equity into the property sector via a hospitality fund created in partnership with Cape-based property developer Flyt Property Investment.
The Cape Town property development scene is surprisingly robust, given the national economic climate and general property market stagnation of 2019. The CBD and fringe areas such as Woodstock are enjoying the fruits of the evident regeneration fever. Adding to this positive drive is Flyt Property Investment, Cape Town’s newest property development brand which was announced on 2 September 2019.
Section 12J of the Income Tax Act – the most efficient tax saving tool, provided by SARS and government that allows you to hold on to your tax cash while investing it wisely.
The section specifically aims to help the growth of small and medium sized businesses by increasing their access to equity finance. To attract investors into this typically under-funded sector, which is imperative for driving economic growth, SARS has written Section 12J into the Tax Act, which offers taxpayers a 100% tax deduction in the year of investment if they invest in SMMEs by way of subscription of shares in a Section 12J Venture Capital Company.
Flyt’s Section 12J compliant property developments give investors the full 12J tax deduction, allowing them to put this saving/refund towards their property purchase. This means that SARS will effectively fund up to 45% of the purchase price of the property.