Tax and SARS knowledge base

Are body corporate levies and other income tax exempt?

Are body corporate levies and other income exempt from normal tax?

Last reviewed: 29 August 2026

Direct answer

For a qualifying body corporate, levy income is exempt from normal tax under Section 10(1)(e)(i). Receipts and accruals other than levies receive a separate exemption only up to an aggregate R50,000 under Section 10(1)(e)(ii). The body corporate must still submit an ITR14 every year and select the correct company type so the relevant return fields are available.

Interest, rental, advertising and service income should not be re-labelled as levies. Classify each amount by its substance and calculate any taxable balance after the applicable exemption.

What this means in practice

Keep levy income in separate ledger accounts from non-levy receipts. The distinction makes the return easier to prepare and supports the exemption if SARS asks for evidence. Capital and special levies can still be levies, but their purpose, raising resolution and use should be documented.

The R50,000 rule applies to aggregate qualifying non-levy receipts and accruals, not separately to every income category. It is not a R50,000 deduction for each bank account or property.

Step-by-step

Confirm that the entity is legally a body corporate and is correctly registered with SARS.
Reconcile member levies to approved budgets, resolutions and debtor records.
List all non-levy receipts, including interest, rentals, recoveries and services.
Separate capital items and expenses that require their own tax analysis.
Calculate the exempt non-levy amount up to the aggregate R50,000 limit and the taxable excess.
Complete the ITR14 using the Body Corporate or Share Block Company classification and relevant exemption fields.
Retain the calculation, financial statements, return and assessment.

Documents and records to keep

Establishment and registration documents.
Annual budget, levy resolutions and member schedules.
General ledger and bank-interest certificates.
Rental, advertising or service agreements.
ITR14 exemption calculation and SARS records.

Important limits and exceptions

An HOA formed as an association of persons is not automatically treated as a body corporate and generally needs SARS approval for its exemption. Also, a receipt being used for common-property expenses does not by itself turn it into a levy.

Deductibility of expenses against taxable income requires a separate analysis. Do not allocate every expense against the taxable portion without checking the connection to producing that income.

When to get tailored advice

Get help if the entity earns substantial non-levy income, operates commercial facilities, receives insurance proceeds, disposes of property or has used the wrong ITR14 classification in prior years.