Costs that can be claimed as tax deductions for Property Owners

This part pertains to you if you own a property that you rent to another person to earn extra money. There are some high-cost expenses related to owning a property, such as the maintenance of a rental property. Fortunately, a number of expenses qualify as tax deductions.

Costs that can be claimed include:

• Interest on bond payments (note: not the full bond instalment)

• Rates and taxes paid on the property

• Water and electricity

• Levies

• Depreciation on furniture in the property (use our handy wear and tear calculator)

• Advertising and/or rental agency fees

• General maintenance and repairs costs like:

• Garden services

• Repairs and painting

• Cleaning services

TIP: Renovations which increase the income earning capacity of the property are regarded as capital expenditure, and therefore won’t be deductible against income for tax purposes e.g. adding on a brand new bedroom.

In the case where you’ve made a loss; SARS will ask whether you’d like to ring-fence the loss for the next year. This means that the loss can’t be offset against other income (like your salary) in the current year, but instead, it will be carried over and deducted from the rental profit made in the following year. In some instances, SARS may choose to either ring-fence it or not, on your behalf.

Remember to keep records of all expenses related to the rental property(ies) that can be claimed back.

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