Manuel opens way for urban development zones

Posted On Monday, 18 October 2004 02:00 Published by eProp Commercial Property News
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THE regeneration of Johannesburg's inner city areas has been given further impetus with the proclamation on Thursday, 14 October of Urban Development Zones (UDZ) in Johannesburg and Cape Town.

 

Trevor ManuelThe identification of these zones clears the way for inner city developers to benefit from major tax breaks.

Johannesburg mayor Amos Masondo greeted the minister of finance's formal announcement in the Government Gazette with delight.

Minister Trevor Manuel identified Johannesburg as the largest UDZ in the country, comprising just under 18km² of residential, industrial and commercial areas in and around the central business district.

This development is expected to boost current efforts to regenerate Johannesburg's inner city, as developers and property investors take advantage of tax concessions to build and renovate buildings in designated areas.

In a statement, Masondo hailed the proclamation as a "major contribution to the future of Johannesburg's city centre".

The tax incentive scheme is based on the Revenue Laws Amendment Act of 2003, which provides for developers who refurbish existing buildings in a designated urban area to receive a 20 percent depreciation allowance over five years.

Developers who construct new buildings in these areas will receive a two percent tax write-off in the first year, followed by a five percent annual write-off over 16 years.

"The incentive takes the form of a tax allowance covering an accelerated depreciation of investment made in either refurbishment of existing property or the creation of new developments within the inner city, over a period of five or 17 years respectively," explained Li Pernegger, programme manager for area regeneration in the City's Economic Development Unit.

The UDZ covers "the central business district and also Newtown and Braamfontein, as well as the high-density and high-rise residential areas of Hillbrow and Berea. Other lower-density residential areas surrounding the general Ellis Park area such as Bertrams, Judith's Paarl, Doornfontein and Troyeville, as well as Bellevue, Bellevue East and Yeoville, form part of the approved UDZ. The manufacturing and industrial strip to the north of the M2 E/W from Benrose in the east to City West in the west is also included".

Pernegger welcomed the size of the area incorporated into Johannesburg's UDZ, saying it "is reflective of its status as the economic powerhouse of South Africa, as well as the significant challenges posed by inner city regeneration".

Masondo said the proclamation complements the City's own efforts, and that of the provincial government, and consolidates the various initiatives that have taken place in recent years.

He pledged the City of Johannesburg's active support in assisting investors who wish to make use of the incentive. "I am especially pleased that the minister agreed to include the residential areas, such as Hillbrow, Berea, Yeoville, Bertrams and Troyeville, as well as the Ellis Park area, which is so crucial for our 2010 World Cup preparations."

Pernegger called on interested investors to get a certificate of location from the City to qualify for the incentives from the South African Revenue Services.

For more UDZ information contact the City's Economic Development Unit 011 358 3442.

Last modified on Thursday, 29 May 2014 12:27

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