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Lease premiums and leasehold improvements

A business that pays a premium to get a lease, or must improve rented premises under the lease, deducts the cost over the lease period, at most 25 years.

Deduction a yearR60,000For 5 years
  • AmountR300,000
  • Spread over5 years
  • Each yearR60,000
How it works, with your numbers
  1. Spread over the shorter of the lease period (5 years) and 25 years: 5 years.
  2. R300,000 ÷ 5 = R60,000 a year.
Good to know
  • Only improvements the lease obliges you to make count. The landlord usually includes their value in income.
  • Improvements you choose to make are claimed as wear and tear or building allowances instead.

For illustration only. This is a guideline to help you plan, not tax advice: a registered tax practitioner must review and approve the final figures before you file.