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South Africa – Wear & Tear Allowances

Capital allowances are a relief from income tax and are based on the capital expenditure incurred on the provision and installation of certain assets within a building that suffer wear and tear, usually plant and machinery, as well as on various types of properties, including certain commercial and industrial buildings, hotels and others.

Every building contains an element of depreciable plant and machinery, which will qualify for capital allowances, such as air-conditioning equipment, hot water installations, lifts and escalators, fitted carpets, furniture and fittings, to name a few. However, other less obvious assets may also qualify, for example, emergency lighting, fire alarm systems and security equipment.

Following the Revenue Laws Amendment Bill 2007, allowances are available on capital expenditure contracted for and incurred on or after 1st April 2007 on the development of qualifying commercial buildings, where the qualifying building is being used by the taxpayer in the course of their trade.  The annual writing down allowances are currently 5% per annum.

Where allowances on commercial and industrial buildings and hotels are concerned, there is often very significant scope for increasing the benefits available by separately assessing the wear and tear allowances on qualifying fixed assets.  By proper planning the tax savings resulting from such an exercise can be too great to ignore.

To qualify for capital allowances, the property owner or occupier must be a taxpayer and must:-

By claiming capital allowances you are easing your tax burden, thereby improving the net return of a property and increasing cash flow. Capital allowances planning should therefore form a vital part of ensuring the viability of any property transaction.

 
 
 

The information contained in our website is believed to be correct, but there may be errors or omissions for which PJB cannot be responsible. It is therefore essential to take advice on specific issues.

 

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Purchase Price

This is the original or anticipated purchase price or development cost of your property.

Do not enter the current value here.

Building Type

Please provide the type of building you are looking to claim allowances on.

Note: You will be able to add further information about the type of building in the next step.

Your options here are;

  • Office.
  • Retail: Including high street, shopping centres and retail warehouses.
  • Mixed Use.
  • Industrial: Including warehouses and distribution centres.
  • Other: Leisure, hotels, casinos etc.
Building Category

Please select the description that best suits your property.

Other Information

Please provide any additional information about your property that you may consider appropriate.

Floor Area

Please enter the total floor area of the property.
You can provide either square footage or metres, but only use figures here.
The floor area you specify can either be gross or net internal space.

Floor Area Units

Please select the type of area e.g. Metres or Feet
and if the measurement has been taken as net or gross internal space.

Date of Purchase

Please enter the approximate month and year of purchase, or
if you have developed the property, please provide the
approximate date of completion.

Location Of Property

Where is the property located? Please provide town/city, and country.