For a pty ltd, a company bought investment property which has less than 5 units, does it mean it has to be 5 entire properties, or does one flat of more than 5 units qualify, also if they do not qualify is there any other deduction they are allowed beside
Important:
This answer is based on tax law for the tax year ending 28 February 2019.
Answer:
Section 13sex refers to “any new and unused residential unit (or of any new and unused improvement to a residential unit) owned by the taxpayer”. Section 13sex is subject to section 36. The term ‘residential unit’ is defined in section 1(1) of the Income Tax Act and we copy from that for ease of reference:
“In this Act, unless the context otherwise indicates—
…
“residential unit” means a building or self-contained apartment mainly used for residential accommodation, unless the building or apartment is used by a person in carrying on a trade as an hotel keeper…”
We have already mentioned section 36, mining. Section 13quat provides for an allowance for a residential building in un urban development zone. Section 13quin specifically excludes “the provision of residential accommodation.”
A low-cost residential unit must in the first place also be a residential unit.