{"id":519,"date":"2021-01-05T09:18:51","date_gmt":"2021-01-05T07:18:51","guid":{"rendered":"https:\/\/118accounting.co.za\/?p=519"},"modified":"2022-02-11T03:33:03","modified_gmt":"2022-02-11T01:33:03","slug":"rental-income-deductible-expenses","status":"publish","type":"post","link":"https:\/\/118accounting.co.za\/rental-income-deductible-expenses\/","title":{"rendered":"Rental Income \/ Deductible Expenses"},"content":{"rendered":"\r\n

 <\/p>\r\n\r\n\r\n\r\n

Owning a secondary property could be rewarding as it creates wealth by generating rental income on your investment and also through long term capital growth. It could also supplement your monthly income. However, not disclosing the rental income or incorrectly claiming expenses that are not in the production of income could result in you been penalised by SARS.<\/p>\r\n\r\n\r\n\r\n

Examples of taxable rental income that must be declared to SARS:<\/p>\r\n\r\n\r\n\r\n

    \r\n
  1. Income derived from renting a portion of your home or outhouse<\/li>\r\n
  2. Holiday homes<\/li>\r\n
  3. Rental of commercial property<\/li>\r\n<\/ol>\r\n\r\n\r\n\r\n

    Examples of deductible expenses that are in the production of income and can be claimed are as follows:<\/p>\r\n\r\n\r\n\r\n

      \r\n
    1. Municipal rates and levies<\/li>\r\n
    2. Electricity and water<\/li>\r\n
    3. Insurance<\/li>\r\n
    4. Security costs<\/li>\r\n
    5. Advertising<\/li>\r\n
    6. Repairs and maintenance<\/li>\r\n
    7. Interest paid on the bond \u2013 the capital repayment is not deductible.<\/li>\r\n<\/ol>\r\n\r\n\r\n\r\n

      It is important to take note that improvements that are of a capital nature will not be expensed but capitalised to the base cost of the property.\u00a0 Examples of improvements can be described as follows:<\/p>\r\n\r\n\r\n\r\n

        \r\n
      1. Extensions to the property<\/li>\r\n
      2. Renovating the kitchen, bedrooms or bathrooms<\/li>\r\n
      3. Installation of security equipment \u2013 alarm system, security beams, camera system<\/li>\r\n
      4. Installation of air conditioners<\/li>\r\n
      5. Erection of a boundary wall<\/li>\r\n
      6. Installing a swimming pool<\/li>\r\n<\/ol>\r\n\r\n\r\n\r\n

        \u00a0While the above costs cannot be deducted against the taxable rental income, they are added to the base cost of the property and upon the property been sold, these costs will reduce the capital gains tax.<\/p>\r\n\r\n\r\n\r\n

        It is also advised to keep all tax invoices relating to expenses and improvements as SARS could request them for review. If you require further information, feel free to contact our team at admin@118accounting.co.za.<\/p>\r\n","protected":false},"excerpt":{"rendered":"

          Owning a secondary property could be rewarding as it creates wealth by generating rental income on your investment and also through long term capital growth. It could also supplement your monthly income. However, not disclosing the rental income or incorrectly claiming expenses that are not in the production of income could result in you … Continued<\/a><\/p>\n","protected":false},"author":11,"featured_media":6293,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"footnotes":""},"categories":[68],"tags":[],"acf":[],"yoast_head":"\nRental Income \/ Deductible Expenses - 118Accounting<\/title>\n<meta name=\"description\" content=\"  Owning a secondary property could be rewarding as it creates wealth by generating rental income on your investment and also through long term\" \/>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/118accounting.co.za\/rental-income-deductible-expenses\/\" \/>\n<meta property=\"og:locale\" content=\"en_US\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"Rental Income \/ Deductible Expenses - 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