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Rental Income FAQs

Posted 6 March 2017 under TaxTim's Blog


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Should interest on your home loan be deducted from your rental income?
Yes, it does, the interest would go under the finance costs, the actual bond repayments are not deductible for tax purposes.

Should my rent which is paid by my boss, reflect on my payslip?
Yes, this would be fully taxable at the same rate as your salary. It can reflect as 'other allowances - taxable" and can reflect under source code 3713 on your IRP5.

Is there a VAT payment on maintenance expenses for my car?
If you aren't registered for VAT then, unfortunately, you cannot claim VAT on any expenses. However, you could deduct the full amount for income tax purposes of the maintenance expense.

Are levies on a rental property tax deductible?
Yes, it can be claimed as a deduction against the rental income in the Property Rental section of your tax return. 

Do I have to submit a return if I receive rental income? OR Do I have to register as a provisional taxpayer if I earn rental income?
Yes, if you earn non-salary income, for example, rental income from a property you should complete an IRP6 return and make manual payments too.  

What are the allowable deductibles from rental income?
Electricity costs, water, rates, and levies to the local municipality are monthly costs which can all be deducted. Even the rental agent’s fee and accountant’s costs. Also, SARS allows only the interest payment on the bond to be deducted against the rental income, not the much larger capital repayment amounts, unfortunately.

How to handle a temporary break in rental income?
You can include the expenses for the months unoccupied thereby reducing the profit. As long as you were actively seeking new tenants.

How to handle Rental Income when married in community of property? OR Treatment of rent with joint ownership? OR Tax on rental income, bond in two names.
When you complete your tax return you need to declare the 100% rental income under the rental income section SARS provides.
This section will ask if you had a partner and you'd need to state your percentage share, you also need to declare the entire income including the entire expenses and SARS will do the split and your partner will declare the same as well, if you guys are requested to submit supporting documents you will both submit your bank statement and your bond instalment statement that shows the debt is in both your names.

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