When claiming a  deduction under section 13quat, certain documentation has to be completed.

Top Tip: As a result of the introduction of the eFiling system, it is no longer necessary for the documentation to be submitted with the relevant return of income when claiming a deduction. Instead, the documentation must be retained for audit purposes for a period of five years. 

There are certain forms you may need:

  • A UDZ1 form must be completed for each building or part of a building for which a UDZ deduction is claimed by the taxpayer that was erected, extended, added to or improved a building or part of a building. This form is not required in the case of the purchase being a developer.
  • A UDZ2 form must be completed for a purchase of a building or part of a building from a developer.
  • A UDZ3 certificate confirms the particulars of the developer and the development. This certificate must accompany the UDZ2 form.
    • The onus is on the person claiming the UDZ incentive to ensure that the information on the UDZ3 certificate is correct. In the event that the Commissioner has reason to believe that the information provided in the UDZ3 certificate by the developer is not correct, the Commissioner will disallow the UDZ incentive claimed unless they can prove that the information is correct.
  • A UDZ4 form must be completed by developers for each building which is likely to exceed R5 million. This form must be submitted to [email protected].

Documentation that must be obtained from the municipality

Taxpayers must obtain a location certificate, issued by the municipality, confirming that the building or part of a building that was constructed, improved or purchased from a developer is located within a UDZ within the boundaries of that municipality.

We have detailed all the reporting requirements for both municipalities and developers.

Last Updated: 21/10/2020 10:19 AM     print this page
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