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Boost to Cape Town's central city

Posted On Tuesday, 19 October 2004 02:00 Published by
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The launch of National Treasury's Urban Renewal Tax Incentive will further stimulate investment in Cape Town Central City and immediate surrounds.

The launch of National Treasury's Urban Renewal Tax Incentive will further stimulate investment in Cape Town Central City and immediate surrounds. The Treasury announced that this incentive, an accelerated depreciation allowance to promote and stimulate development within the inner cities of sixteen large cities in South Africa, would firstly apply to Cape Town and Johannesburg.

The City of Cape Town had demarcated special inner-city zones in the Cape Town and Bellville CBD environs. The Urban Renewal Tax Incentive encourages the refurbishment and construction of both commercial and residential buildings.

Cape Town Partnership CE Andrew Boraine said that: "It is very significant that National Government is recognising the need to stimulate the renewal of the major inner-city areas in South Africa. For the past five years, the Partnership has spent an enormous amount of time and effort together with the public and private sectors in renewal efforts in Cape Town's Central City. We have been successful in attracting well over R6-billion in investment over the period, and believe that this pace of spending will now accelerate given the new tax breaks.

"More importantly, it will allow parts of the city that have not enjoyed the same level of investment to claim their share of the renewal spend. This pertains most specifically to the eastern part of the Central City, which has not experienced the same degree of private sector upgrade spend as the historic core and the Foreshore.

"The incentive offers a wonderful new opportunity to participate in the urban renewal and development of the Cape Town Central City. It has considerable upside investment benefits for investors, particularly those upgrading properties.

"This will make investing in the inner city very attractive for both local and international investors and we believe that it is appropriate that all investors in inner city renewal will now be incentivised and rewarded for their contribution."

For redevelopment projects, there is a 20% tax deduction in the first year, plus an annual depreciation of 20% over four years. For new development, it offers a tax deduction of 20% in the first year, plus an annual depreciation of 5% for the next 16 years.

Cape Town has two urban development zones, capturing part of the Cape Town CBD and the Bellville CBD. Included in the Cape Town CBD portion is most of the historic Cape Town CBD and properties adjacent to the Main Road and Klipfontein Road Corridors. This includes portions of the suburbs of Salt River, Woodstock, Observatory, Maitland, Mowbray, Athlone and Gatesville.


Publisher: Cape Business News
Source: Cape Business News
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