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Deductions against rental income

Posted 15 June 2016 under Tax Questions



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Conwell says:
14 June 2016 at 12:56

I have moved from CPT to JHB. I own a house in CPT which is now being rented out to tenants. In JHB I am currently renting. From a SARS perspective, do I need to declare the rental income as I only own one property and its not a second property bringing in an extra income? What I receive as rental income in CPT immediately covers my rent here. So I do not gain anything. In face what I am asking as a rental is the same as what I pay for my rent here.

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TaxTimTaxTim says:
14 June 2016 at 14:01

Rental income is taxable and the profit made after levies and interest etc needs to be declared and taxed on your return. The rent you currently pay for your living is not deductible and cannot be offset unfortunately.


Conwell says:
14 June 2016 at 14:12

Thank you for that clarity.

Just as a add on question. Although I receive that rental income, it goes straight back into the bond for my monthly payment of which interest is paid.

So from a SARS perspective can I subtract the monthly interest paid on the bond? Usually this is very high. E.g. Monthly bond = R5000(pm), Interest = R4250 (pm). Actual contribution towards the capital is R750.

Does this mean I can claim and deduct the interest at R4250 minus other expenses such as rates, etc. off from the monthly rental income to prove that I do gain much if anything at all.


Conwell says:
14 June 2016 at 14:13

do not*


TaxTimTaxTim says:
14 June 2016 at 14:36

Only the interest will then be deductible and not the entire mortgage payment. Yes, you would be able to deduct the other expenses as well off the rental received.


Conwell says:
15 June 2016 at 11:16

awesome, one last questions please.

my medical is currently directly being paid over from my salary to the medical aid provider....and I think after that the balance is taxed.

do I still use the tax certificate to claim from SARS or cannot I not claim anything?


TaxTimTaxTim says:
15 June 2016 at 15:22

Yes you can still declare the contributions made for the year and your out of Pocket expenses if you had some.


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