Page 34 - Nexia Cape Town 2018 TG Digital

CAPITAL INCENTIVE ALLOWANCES

ASSET TYPE CONDITIONS FOR ANNUAL ALLOWANCES ANNUAL ALLOWANCES
Industrial Cost of buildings or improvements, provided Either 2%,5%, or 10%
Buildings building is used wholly or mainly for carrying on depending on date cost
a process of manufacture or similar process incurred
Commercial Refurbishment of existing building (excluding 20%
& Residential low-cost residential units)
Buildings in
Designated Construction of new building and extension to 20% in 1st year
Urban Areas existing buildings (excluding low-cost residential 8% in each of
units) 10 subsequent years
Low-cost residential units: New buildings or Year 1: 25% of the cost
extension/additions to existing buildings where Year 2 – 6:
taxpayer incurs the cost 13% of the cost
Year 7: 10% of the cost
Low-cost residential units: Improvements to Year 1: 25% of the cost
existing buildings where the existing structure is Year 2 – 4:
preserved and where taxpayer incurs the cost 25% of the cost
Low-cost residential units: New buildings or Year 1:
extension/additions to existing buildings where 55% 3 25% of the cost
taxpayer purchased building from developer Year 2 – 6:
55% 3 13% of the cost
Year 7:
55% 3 10% of the cost
Low-cost residential units: Improvements to Year 1:
existing buildings where the existing structure 30% 3 25% of the cost
is preserved and where taxpayer purchased Year 2 – 4:
building from developer 30% 3 25% of the cost
Hotel Buildings Cost of portion of building or improvements used 5%
Improvements that do not extent the exterior 20%
framework of the building

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