TAXATION OF RENTAL INCOME – Q&A

Q: How is rental income taxed?

A: The rental income you received will be added to all your other income that you have received for the relevant year of assessment, it can however be reduced by any allowable expenses related to your rental property trade.

Q: What expenses may I claim to reduce my rental income?

A: Expenses that may be deducted from the rental income includes:

  • Rates and taxes;
  • Levies;
  • Interest on mortgage or bond;
  • Agency fees of estate agents;
  • Advertising expenses;
  • Insurance;
  • Cleaning services;
  • Gardening services;
  • Repairs and maintenance; and
  • Internet services.

Q: May I claim the total amount of these expenses?

A: Yes, provided that 100% of the property is rented out. If only a room with its en-suite bathroom is rented out, you should apportion the total expenses in relation to the area rented out expressed as a percentage of the total area of the house.

Q: If I own a property with another person, will I be taxed on the total rental income?

A: No. You will only be taxed based on your percentage of ownership held in the property.  You are required to declare the total rental income and expenses (100%) and indicate your percentage shareholding/ownership held in the property.

Q: What documents should I submit with my income tax return?

A: You are not required to submit documents with your income tax return, unless specifically requested to do so by SARS. You are, however, required to retain a schedule detailing your rental income and expenses together with the all supporting documents for five years.

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