The Paradigm: exciting R1-billion Cape Town development launching soon — The Paradigm in Cape Town

In little over three weeks, interest in The Paradigm, a world-class mixed-use development has skyrocketed, with over 4 000 interested buyers registering their interest. The iconic development launches online on the 31 July 2024 at 1pm.

Nestled in the heart of Cape Town city centre at 100 Buitengracht Street, The Paradigm redefines urban sophistication with its iconic architecture and unparalleled amenities. Nine years in the making, The Paradigm is brought to you by property development and construction experts Tiber and Vantage Property with sales by Revo Property.

With 243 premier residences, this architectural marvel offers panoramic views, bespoke amenities and three levels of curated retail, catering to a wide variety of lifestyles. The Paradigm features an impressive range of studio, one-, two-, three- and four-bedroom residences, as well as two exclusive skyview penthouses.

Fast facts

Residences range from R1.75-million to R35.95-million (US$97 000 to $1.98-million)
Purchase on launch and get R100 000 off
Expected completion set for the first quarter of 2027
Sales launch online on 31 July 2024 at 1pm
Powerful tax incentives apply (See more below)

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Benefits of investing at The Paradigm on launch day

Opportunities to own at such an illustrious address don’t come along often, and The Paradigm presents a unique chance to invest in luxury living. Select the serviced and furnished option and turn your investment into an income generator overnight.

Access to the best selection of apartments
Powerful UDZ and Section 13Sex incentives for buy-to-let investors
Capital appreciation for two years at roughly 7% per annum
Purchasers can put down a 10% or 30% deposit
Projected net yields up to 18% for buy-to-let apartments
No VAT or transfer duties payable

Sales for this ground-breaking development launch online via the Launchbase interactive price list on Wednesday, 31 July at 1pm and proactive investors can benefit from an incredible R100 000 discount for apartments reserved on the day.

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Powerful tax incentives – Section 13Sex tax scheme

Investors have access to powerful tax incentives, including the popular Section 13Sex of the Income Tax Act No 58 of 1962. This scheme enables any taxpayer who owns five or more new, residential rental units (they do not all have to be from the same development), to claim up to 55% of the purchase price as a tax deduction.

Example:

Purchase five units at a total purchase price of R19 868 075
Minus the launch discount = R500 000 (R100 000 per unit, if purchased on launch)
Final purchase price = R19 368 075
Deemed purchase price = R10 652 441 (55% of final purchase price)
Five percent of the deemed price may be used as a tax deduction per year

This works out to a tax deduction (tax write-off) of R532 622/year for 20 years. The total tax write-off is then R10 652 441 over 20 years.

Taxpayer criteria for Section 13Sex:

The taxpayer must own at least five residential units. A residential unit refers to a building or self-contained apartment, mainly used for residential accommodation with the exclusion of structures used for business purposes – for example, hotels.
All units must be situated in South Africa.
Residential units must be new and unused – for example, buyers of flats that had previously been occupied would not qualify for this incentive.
The units must be used solely for the purpose of trade (residential letting). This prevents housing claims for personal use.
Please consult your tax advisor for further clarification and information.

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Urban development zone (UDZ)

The Cape Town UDZ tax incentive is a South African Revenue Service-administered tax incentive encouraging residential and commercial development in certain specified areas in Cape Town, in which The Paradigm will be located. The tax incentive offers property owners a tax deduction against taxable income over 11 years and could act as a deferment of tax payable until the apartment is sold.

How does it work?

The purchaser of a redeveloped residential apartment located in the UDZ will be able to claim an income tax allowance. Fifty-five percent of the purchase price is deductible. The tax allowance is claimed over 11 years at a rate of 20% in the first year and 8% in the succeeding 10 years. The tax allowance is recouped on the sale of the apartment for an amount greater than or equal to cost, which can be deferred for as long as the owner holds the property.

Example: On a residential apartment with a cost of R2-million, the purchaser is entitled to claim a tax allowance of 55% of the cost of the unit, which equals R1.1-million over 11 years. The R1.1-million tax allowance is claimed over 11 years at a rate of 20% in the first year and 8% in the succeeding 10 years, which results in an annual income tax deduction of R220 000 in the first year and R88 000 in the subsequent 10 years.