Canny real estate investors legally leverage the Income Tax Act in their favour, to get SARS to pay them millions of rand back from their capital invested into their buy-to-let property portfolios.<\/p>\n
This is according to\u00a0Jacques Fouch\u00e9, CEO of property group IGrow, who said that South Africans could stand to earn millions by making a SARS an\u00a0active role-player in their property investments, rather than a hostile force.<\/p>\n
“SARS is actually on the side of the buy-to-let investors \u2013 it genuinely wants investors to pay less in taxes.<\/p>\n
“The massive tax advantage that you get from SARS is called Section 13Sex of the Income Tax Act. By putting your time, and investors strategy into activities that produce jobs, housing, and grow the economy, you get tax benefits,” he said.<\/p>\n
“SARS is effectively making a deal \u2013 if you are going to help us by providing affordable housing in South Africa which in turn helps us grow the economy, then we will make it worth your while by giving you money back \u2013 a lot of money.”<\/p>\n
According to\u00a0Fouch\u00e9, there are\u00a0four key requirements to qualify for the SARS sec 13sex tax incentive:<\/p>\n
A practical example<\/strong><\/p>\n “For every five properties investors buy, SARS allows a minimum of 55% of the purchase price as a tax deduction,” said\u00a0Fouch\u00e9<\/p>\n So, if you were to buy five properties, for a million rand each:<\/p>\n “As a smart investor, using this incentive you can build your property portfolio effectively tax-free until retirement,” said\u00a0Fouch\u00e9<\/p>\n “Applying what I call the \u2018stackable tax effect\u2019 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.”<\/p>\n “SARS is there to make you rich in real estate, especially if you follow the rules of the rich.”<\/p>\n\n
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