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Deduction of finance charges from rental income.

Posted 9 February 2016 under Tax Q&A


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Banker says:
8 February 2016 at 14:56

I have a question relating to rental income from investment property in my personal name. Very simple put, I have R 1000 000 available on my primary residence bond - I would like to utilize this to acquire a rent producing flat. Will I be able to deduct the finance charges incurred on the R 1000 000 from the rental income to reduce my taxable rental income?

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TaxTim TaxTim says:
9 February 2016 at 21:00

It will be difficult to link the financing (on your primary residence) to the investment property and it may be confusing for SARS should they decide to audit you, which seems to be happening more and more often lately.
It would be better to take out a separate new bond specifically linked to your investment property.

Please read our blog too on Rental property deductions


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