A rental property is jointly owned by two individuals. There is no registered bond over the property, however each part owner has contributed funds to purchase the property. Can a loan be created and interest charged on this loan to each of the owners and a corresponding interest deduction against the rental be claimed?
For interest to be claimed against the rental income, it needs to be charged on a legitimate loan taken out to fund the purchase of the property. SARS can request supporting documents to validate the loan amount, purpose for which it was taken out etc
This will be difficult to do for a property which has no registered bond and is already paid off.
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