SARS Section 12B solar tax allowance vs wear-and-tear for a commercial building owner?
We own our 600m² warehouse in Montague Gardens through a property (Pty) Ltd and are installing a R480,000 grid-tied solar PV system this quarter. How does the Section 12B capital allowance work now that the temporary 125% Section 12BA incentive window has closed?
◆ 103asked 12 Sept2 answers
✓ Accepted by the asker
12 Sept@ruan_isaacs Even with the temporary 125% Section 12BA window closed, the permanent Section 12B(1)(h) allowance is still fantastic for solar PV systems under 1MW: you deduct 100% of the cost (panels, inverters, mounting structures, and installation costs) in Year 1 as soon as the system is brought into use for your trade! Make sure your installer's invoice separates the PV generation plant from unrelated roof repairs so your tax schedules are bulletproof if SARS requests supporting documents.
12 Sept@midranditpro, One important nuance to @tygerbergtax's point: if your property (Pty) Ltd leases the warehouse to your operating (Pty) Ltd, make sure the entity that incurs the cost and claims Section 12B is actually generating taxable trade income against which the allowance can be utilized (or structured properly via lease improvements).
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