It is not often that SARS offers tax relief but when it is presented as an option it should be used without delay. Within Section 13 of the Income Tax Act lies a little gem. This section offers tax advantages for property investors being able to claim millions of rands back from SARS. Property buyers can leverage Section 13 of the Income Tax Act to obtain tax returns from their buy-to-let property portfolios. The tax write-offs obtainable through Section 13 come into effect when property investors buy a minimum of five residential units for rental. Purchasers are then able to off-set their investment by depreciating the cost of the units at an accelerated rate of 5% a year over 20 years. Mrs. Vest Benefit purchased five new residential units at a price of R1 000 000 each and rented them out to earn additional income.

A.You are required to calculate the tax benefit that the taxpayer will enjoy over a period of 20 years and the equivalent annual allowance.

B.Briefly discuss the provisions of sections 13 regarding property investors and describe the requirements to qualify for such tax incentive