The Harri has partnered with Anuva Investments Limited, a registered venture-capital company and financial-services provider, to offer the Section 12J Flyt Select Fund.
Section 12J of the Income Tax Act enables buyers at the highest marginal tax rate of 45% to deduct the full amount of an investment in a qualifying business from their tax liability in the relevant year. Qualifying sectors include hospitality, renewable energy and manufacturing.
Buying an apartment in The Harri qualifies.
This is how it works. Once you’ve paid in your investment, the Flyt Select Fund reinvests it in The Harri, which operates as a property-holding company. The company in turn purchases the apartment you want, and enters it into an aparthotel offering at The Harri. ‘Aparthotel’ is an apartment-hotel that combines the best of 5-star hotel amenities with luxurious self-contained apartment living. An aparthotel qualifies as a 12J investment as it meets three criteria: Is furnished; has a food offering (downstairs restaurant); and is let out to short-term renting guests. The investment must be held for a minimum 5-year period before it can be sold again.
Your investment is rented out to short-term guests, and the income generated is put towards servicing your bond. You cover any shortfalls or retain any surplus.
You have preference when you’d like to stay in your apartment. You’re fully in charge of your investment, and if you want to sell it, you can choose when and at what price, after the initial 5-year period.
Here are the details of the transaction.