The tax benefits available to investors in immovable property in South Africa

Abstract

The object of this thesis is to provide guidelines relating to the tax benefits that are available to investors in immovable property in South Africa. This was done by analysing the various sections of the Income Tax Act, as well as case law and South African Revenue Service guidelines that interpret these sections, which provide for expenditure which may be deducted by taxpayers from their income when conducting the trade of letting immovable property in order to reduce their overall tax liability. The thesis also includes a chapter dealing with the four different types of vehicles that taxpayers may use when investing in property. It was found that there are significant tax benefits available to investors in immovable property through the general deductions provided in terms of section 11(a) of the Act, as well as the specific deductions that the legislature has promulgated for investors in immovable property. It was also found that each of the four vehicles has its own advantages and that a taxpayer's personal circumstances will dictate which of the vehicles will best suit his or her needs.