If you are looking for an investment that can work as hard as you do – earning income today while building long-term value, property remains one of the most compelling options in SA. Done right, it delivers stable cash flows, inflation resilience, powerful tax efficiencies, and a tangible legacy for the next generation.

This is whether you are a business buying your own premises, investing in commercial property for yield, or an individual or trust growing a diversified, wealth-building portfolio.

At Nexia SAB&T, we help clients across SA turn property ambitions into robust, compliant, tax‑efficient strategies – backed by modelling, incentives navigation, and end‑to‑end execution and we are Closer to You, with national reach and global expertise as part of the Nexia network.

Why property still makes sense – right now

As a business, control your costs and destiny: Owning your trading premises stabilises occupancy costs and shields you from unpredictable rentals and escalations. It also builds equity on your balance sheet as the asset appreciates – a strategic hedge in volatile cycles.

For investors, individuals and trusts: Real income, real assets: Well selected properties generate rental income while you ride long term capital growth. Structure matters: individuals, companies and trusts face different capital gains tax (CGT) outcomes – currently c.18% for individuals, 21.6% for companies and 36% for other trusts (effective rates), so early planning pays.

SA’s tax framework rewards smart property investment: From commercial‑building allowances to urban‑renewal incentives and SEZ benefits, policy tools are available if you know where to look and how to qualify.

The tax and incentive levers that most people miss

Commercial building allowance (section 13quin)

If you erect or improve a new and unused commercial building and use it wholly or mainly for trade (not for residential letting), you can typically deduct 5% of cost per year (subject to conditions). SARS’s latest guidance sets out definitions (what counts as a ‘building’ or ‘improvement’), timing rules and limits – vital to get right before you sign.

Urban Development Zone (UDZ) allowance (section 13quat)

Investing in qualifying buildings in designated inner‑city UDZs can accelerate deductions: 20% in year 1, then 8% for 10 years for new builds or extensions; separate rules apply for improvements. SARS updated the UDZ Guide in June 2025, confirming the incentive’s extension to 31st March 2030 and clarifying the requirements.

Special Economic Zones (SEZs)

Qualifying companies operating in an approved SEZ may benefit from a reduced corporate income tax rate of 15%, an accelerated 10% building allowance, and (where applicable) customs or VAT relief and the Employment Tax Incentive – subject to strict qualifying criteria and activity exclusions.

Energy efficiency (section 12L)

Cut your operating costs and your tax bill. With 12L extended to 31st December 2030, businesses can deduct 95c per verified kWh (or kWh‑equivalent) saved (once independently measured/verified and certified by SANEDI). SARS’s 2024 Interpretation Note explains qualification, baselines, and claiming; SANEDI’s 2025 notice and independent tax alerts confirm the extension.

VAT on property transfers – zero‑rating ‘going concerns’

Where a let commercial property (or other enterprise) is sold as a going concern between VAT‑registered parties, and the contract records the correct statements, VAT can be zero‑rated (0%) instead of 15%—a major cash‑flow advantage if conditions are met. SARS’s Interpretation Note 57 spells out the tests and wording to get right.

Transfer duty – know your thresholds

For residential acquisitions (not subject to VAT), transfer duty applies on a sliding scale. For 1st March 2024 – 31st March 2025, no duty is payable up to R1,100,000; from 1st April 2025, the threshold rises to R1,210,000 with bracket adjustments. Planning your timing – and contract terms, can save real money.

Three quick case studies (anonymised) that show what’s possible

We have changed details to protect confidentiality; these scenarios are based on typical mandates and South African law as currently in force. Always get tailored advice for your facts.

Case Study 1: Owner‑occupied factory – ‘rent to yourself’, keep the upside

A Gauteng engineering firm bought a newly built 3 000m² facility and moved out of leased premises. By aligning construction timing and use with s13quin, the company claimed the 5% annual commercial‑building allowance on cost. We layered in a 12L programme (variable speed drives, heat‑recovery and LED) certified by SANEDI, unlocking 95c/kWh deductions and cutting energy intensity. The team structured the sale of the old, leased enterprise as a zero‑rated going concern, preserving cash in the transaction.

Result: lower all‑in occupancy cost versus renting, stronger balance sheet, and tax‑efficient cash flows that improved debt service cover materially in the first three years (per our pre‑purchase financial modelling).

Case Study 2: Inner‑city mixed‑use – reviving a UDZ asset

A family property trust acquired a decayed CBD building inside a designated UDZ, then executed a compliant refurbishment. The project qualified for UDZ accelerated allowances – 20% in year 1 and 8% for 10 years, which we modelled against projected rentals. On disposal planning, we mapped potential CGT pathways for the trust versus a company SPV and implemented a distribution policy to optimise beneficiaries’ tax outcomes within the rules.

Result: an attractive after‑tax yield uplift and a clearer, compliant exit strategy.

Case Study 3: Manufacturing in an SEZ – tax rate arbitrage and scale

A mid‑cap manufacturer committed to an SEZ location, meeting the qualifying company criteria. With the 15% corporate tax rate and a 10% SEZ building allowance, plus ETI on qualifying hires, our incentives team helped secure approvals and embedded compliance controls. We integrated 12L for process‑efficiency savings in year two.

Result: improved after‑tax margins and faster payback, with governance comfort for lenders and the board.

Strategic wealth planning and structuring: We compare personal, company and trust ownership, and guide on hybrid or ring‑fenced SPV approaches – factoring CGT inclusion rates, dividends and donations tax interactions, and estate objectives.

Tax compliance and optimisation: From s13quin, UDZ, SEZ, and 12L to VAT going‑concern zero‑rating and transfer duty timing, we build an incentives roadmap, document eligibility and keep you compliant with SARS interpretations and deadlines.

Financial modelling and deal support: We test scenarios: rent versus buy, debt terms, capex phasing, vacancy stress, and after‑tax IRR – so you decide with clarity. Our nationwide team offers audit, tax and advisory depth with local knowledge and global reach through Nexia.

Grants, incentives and SEZ navigation: We align projects with national priorities, coordinate with SEZ stakeholders, and prepare robust submissions and compliance packs – reducing friction and time‑to‑benefit.

Regulatory and financial compliance: From IFRS to company secretarial, POPIA, payroll/ETI and VAT, we put the right controls in place and support your teams with practical tools and periodic health checks.

Leveraging debt: Amplifying returns and unlocking tax advantages

Property transactions often involve significant capital outlay, but smart use of debt can transform the economics of a deal. By structuring financing strategically, you can amplify returns, preserve liquidity, and unlock tax benefits that enhance after-tax yields.

Forms of debt that work for property deals:

• Term loans: Fixed or floating-rate loans aligned with asset life, ideal for owner-occupied or investment properties.
• Mortgage bonds: Secured against the property, often offering competitive rates and longer tenors.
• Development finance: Tailored for construction or refurbishment projects, with drawdowns linked to milestones.
• Mezzanine debt: Hybrid instruments that bridge equity gaps, often used in larger or complex transactions.
• Structured finance: Combining senior debt, mezzanine, and equity for optimal capital stack efficiency.

Tax benefits of debt financing:

• Interest deductibility: Interest on borrowings used to produce income is generally deductible, reducing taxable profits.
• Capital allowances and debt synergy: Pairing building allowances (e.g., s13quin, UDZ, SEZ) with debt financing can accelerate tax shields and improve cash flow.
• Leveraged IRR boost: Using debt prudently can magnify equity returns – especially when combined with incentives like zero-rated VAT on-going concerns or transfer duty planning.

We model debt structures alongside tax incentives to ensure:

• Optimal gearing ratios for risk and return.
• Cash flow resilience under stress scenarios.
• Compliance with thin capitalisation and interest limitation rules under South African tax law.
• Integration with estate and trust planning, so debt doesn’t compromise long-term wealth objectives.

Match the asset to the strategy. Owner‑occupation, income yield, or development each trigger different tax, funding and risk profiles. Early clarity saves money later.

Get the tax clock right. Many allowances depend on when construction starts, when an asset is brought into use, or where it sits (UDZ or SEZ). Slipping a date can cost years of deductions.

Document for zero‑rating. If you are relying on a VAT going‑concern zero rate, ensure both parties are VAT‑registered and that the agreement includes the required statements – in writing.

Plan for CGT and exit. Ownership (individual vs company vs trust) meaningfully changes your effective CGT and estate outcomes. Model exits before you enter.

Don’t leave 12L on the table. If you’re upgrading lighting, HVAC, drives or process controls, engage a SANAS‑accredited M&V body and SANEDI early so your savings qualify for the 95c/kWh deduction.

Ready to unlock value from property?

Whether you are a business owner eyeing your own premises, an investor targeting resilient yields, or a trustee building intergenerational wealth, Nexia SAB&T brings the modelling, structuring and compliance horsepower to help you invest with confidence.