August 23, 2005
By Anish Abraham
OVER R1-billion worth of building improvements are on the cards for Jozi's inner city as many property owners prepare to take advantage of the Urban Development Zone (UDZ) tax incentive scheme.
That is according to Sol Cowan, the member of the mayoral committee for the inner city, who was speaking at a three-day expo at the Parktonian Hotel in Braamfontein, from 18 to 20 August.
Executive Mayor Amos Masondo, who has targeted inner city regeneration as a priority, formally launched the zone at the conference.
Including much of the central business district and surrounding inner city suburbs, the 1 800ha zone is the largest of its kind in the country.
"It went very well," said Lebo Ramoreboli, a project consultant for area regeneration in the City's economic development unit . There was a lot of interest in the tax incentive scheme that had been offered by the national government to stimulate urban regeneration.
Under the incentive, tax-paying investors within the designated area are allowed to deduct from taxable income their entire investment in refurbishing their property over a period of five years, at the rate of 20 percent.
For new property developments, the deduction amounts to 20 percent in the first year and 5 percent a year for the next 16 years.
One of the main challenges that emerged from workshops and discussions at the expo was the issue of sectional titles. The incentive only targeted owners of an entire building, not just a part thereof, Ramoreboli said.
Experts from the legal, financial and property management fields also spoke at the conference.
Since the zone was declared in October 2004 by Minister of Finance Trevor Manuel, there have been 30 confirmed registrations by individuals and companies who are spending between R100 000 and R400-million on refurbishing buildings.
"There have been more people submitting their applications," added Ramoreboli, who is optimistic that more property owners will eventually take up the offer.
Major corporations that have their head offices in the city centre include the country's top three banks - Standard Bank, First National Bank and Absa.
Rory Roriston, the director of corporate advisory services at Standard Bank, commended the City for its work in the central business district, adding Standard Bank was committed to the revival of the inner city.
The main reasons for the bank's decision to remain in the inner city included easy access, properly planned infrastructure for dense usage, extensive incentives and the political will to turn Johannesburg into "the gateway to Africa".
City officials are working on a marketing and awareness strategy to ensure the UDZ and its benefits are constantly kept on the agenda, drawing more investors to make use of the tax incentive.
This could include further workshops for owners and other parties to debate relevant issues with experts from the public and private sector.
"We are hoping to have a definite programme by September," Ramoreboli said.
For more information on the Johannesburg UDZ, contact Lebo Ramoreboli on 011 358 3437 or by email on lebor@joburg.org.za
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