14 October 2004 Press Release New Tax Incentive for Inner City Investors The Minister of Finance, Honourable Trevor Manuel, announced today the promulgation of the Urban Development Zones in terms of the newest tax incentive scheme to encourage inner city renewal across South Africa. The inner city of Johannesburg, comprising just under 18km2, is the largest UDZ in the country, reflective of its status of the economic powerhouse of South Africa, as well as the significant challenges posed by inner city regeneration. The inner city includes the central business district, and also Newtown and Braamfontein, as well as the high-density and high-rise residential areas of Hillbrow, and Berea. Other lower-density residential areas surrounding the general Ellis Park area such as Bertrams Judith's Paarl, Doornfontein, and Troyeville, as well as Bellevue; Bellevue East and Yeoville form part of the approved UDZ. The manufacturing and industrial strip to the north of the M2 E/W from Benrose in the east to City West in the west is also included. See map at www.joburg.org.za/udz Any taxpaying, property owning, individual or entity may claim the tax benefits of the UDZ incentive. The incentive takes the form of a tax allowance covering an accelerated depreciation of investment made in either refurbishment of existing property or the creation of new developments within the inner city, over a period of five, or seventeen years, respectively. The executive mayor of Johannesburg, Councillor Amos Masondo, said today that the city is also playing a key role in driving inner city regeneration. "I am delighted that the Minister of Finance has taken such a strong interest in inner city regeneration. By announcing this incentive the Treasury has made a major contribution to the future of Johannesburg's city centre. This complements our own efforts and that of the Provincial Government, and consolidates the various initiatives that have taken place in recent years. The City of Johannesburg will play an active role in assisting investors who wish to make use of this incentive. I am especially pleased that the Minister agreed to include the residential areas such as Hillbrow, Berea, Yeoville, Bertrams and Troyville, as well as the Ellis Park area which is so crucial for our 2010 World Cup preparations." The UDZ incentive allows for far more private sector investment than before, and makes redevelopment of existing building stock far more attractive and financially viable for property owners." The council plays a part in the roll out of the incentive. Any investor must get a certificate of location from the city in order to qualify for the incentive from SARS. Once construction of the refurbishment or new development in the inner city has been completed, the certificate of location must be submitted to SARS with the relevant tax return in order to obtain the depreciation allowance. For more details, go to www.joburg.org.za/udz and www.treasury.gov.za. Li Pernegger Programme Manager (Economic Area Regeneration)Finance & Economic Development, City of Johannesburg Cell: +27 (0)82 464 4287 Tel: +27 (0)11 358 3433 Fax: +27 (0)11 358 3444 E-mail: lpernegger@joburg.org.za Web: www.joburg.org.za/udz Zandile Nkuta Spokesperson For The Executive Mayor City of Johannesburg Tel: +27 (0)11 407 7524 Cell: +27 (0)82 464 9449 Fax: +27 (0)11 339 5709 E-mail: znkuta@joburg.org.za Web: www.joburg.org.za/udz