Hide
Earn under R350,000? Click here to see why you still need to file to get your Tax Refund.
CLOSE
Get SARS Tax Dates and Deadlines in your Inbox
 

We'll tell you when you need to file, along with tax tips and updates.

Home Office property business expense calculations?

Posted 22 September 2015 under Tax Q&A


Let TaxTim
help you
submit your
Tax returns!



TaxTim will help you:
  • Do Your Tax Return Easily
  • Avoid penalties
  • Maximise your refund
Tim uses your answers to complete your income tax return instantly and professionally, with everything filled in in the right place.

Let Tim submit your tax return direct to SARS in just a few clicks!

Get started

Blog Categories


Ask TaxTim

Got a question you want answered about tax?

Visit our helpdesk →
Neil says:
18 September 2015 at 15:44

We run a small hair salon from home for my wife, she does business as a sole-proprietor and the salon is her sole income source. I understand that we can deduct for ease of explanation 10% (amount of space occupied by the salon in relation to the whole property) from all rates and taxes, electricity etc. I am unsure about the interest/rent piece. Can the salon pay "rent" or can you just subtract 10% of the interest on the bond as business expense (bond is in my name). I've also read that deducting this piece as a business expense now can influence your Capital Gains Tax waiver amount when selling the property later on, is this the case?
Regards

This entry was posted in Tax Q&A and tagged , , , , , . Bookmark the permalink.

TaxTim TaxTim says:
22 September 2015 at 7:08

Your wife will be able to deduct all the business expenditure incurred for the salon which would ordinarily include a percentage of the rental/interest on the bond and related costs. However as the property is in your name she would not be able to use the normal methods. The best way to do this would be for her to rent out the space from you for which you would charge her a normal marker related rental or the equivalent of her usage. So take the size of the salon as a percentage of the house and then multiply that percentage by mortgage amount and the electricity, rates and levies and other costs which would be considered "'shared"' given her usage of the property for the salon. She would then have to pay you this rent, but would be able to deduct it from her costs and reduce her taxes owing.

Indeed the property will have to be split when sold in terms of CGT to take into account the portion which was not used for living purposes and CGT would be paid on that.


Get SARS Tax Dates and Deadlines in your Inbox
 

We'll tell you when you need to file, along with tax tips and updates.

Blog Categories


Let TaxTim
help you
submit your
Tax returns!



TaxTim will help you:
  • Do Your Tax Return Easily
  • Avoid penalties
  • Maximise your refund
Tim uses your answers to complete your income tax return instantly and professionally, with everything filled in in the right place.

Let Tim submit your tax return direct to SARS in just a few clicks!

Get started