Section 13sex is an important tool for all property investors. Even if your properties are cash flow positive and profitable through your rental income, you can still reduce your tax liability substantially through a key tax incentive. In certain situations, you can even eliminate income tax legally whilst remaining cash flow positive!
Year | Unit Trust Value | Property Portfolio Equity | Difference | % Difference |
|---|---|---|---|---|
5 | R3,268,705 | R3,012,618 | R221,244 | 7.6% |
10 | R4,802,801 | R6,484,392 | R2,382,948 | 45% |
15 | R7,056,890 | R11,438,433 | R5,412,067 | 61% |
20 | R8,854,709 | R18,534,994 | R9,680,285 | 70.6% |
25 | R15,235,296 | R28,747,814 | R15,737,342 | 75.3% |
30 | R22,385,648 | R43,526,113 | R24,409,460
| 77.9% |
| Property Portfolio Market Value | = R8,019,651 |
| Equity In Property Portfolio | = R3,012,618 |
vs
| Unit Trusts/Share Portfolio | = R2,791,374 |
| Investment Return Difference | = R221,244 |
| Property Portfolio Market Value | = R11,247,975 |
| Equity In Property Portfolio | = R6,484,392 |
vs
| Unit Trusts/Share Portfolio | = R4,101,444 |
| Investment Return Difference | = R2,382,948 |
| Property Portfolio Market Value | = R22,126,469 |
| Equity In Property Portfolio | = R18,534,994 |
vs
| Unit Trusts/Share Portfolio | = R8,854,709 |
| Investment Return Difference | = R9,680,285 |
| Property Portfolio Market Value | = R43,526,113 |
| Equity In Property Portfolio | = R43,526,113 |
vs
| Unit Trusts/Share Portfolio | = R19,116,653 |
| Investment Return Difference | = R24,409,460 |
Year | Market Value | Equity | Rental Income | Contribution/Surplus | Tax Deduction |
|---|---|---|---|---|---|
5 | R8,019,651 | R3,012,618 | R48,668 | – R16,514 | R157,242 |
10 | R11,247,975 | R6,484,392 | R65,129 | – R5,194 | R786,211 |
15 | R15,775,866 | R11,438,433 | R87,158 | + R9,954 | R1,572,423 |
20 | R22,126,469 | R18,534,994 | R116,637 | + R30,226 | R2,358,634 |
25 | R31,033,517 | R28,747,814 | R156,086 | + R57,355 | R3,144,845 |
30 | R43,526,113 | R43,526,113 | R208,879 | + R93,659
| R3,144,845 |
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