Tax and SARS knowledge base

Can I deduct rental bond interest, rates, repairs and agent fees?

Last reviewed: 28 August 2026

Direct answer

Usually, yes, but only to the extent that an expense was incurred in producing your rental income and is not private or capital in nature. SARS expressly lists rates and taxes, bond interest, advertising, estate-agent fees, qualifying homeowner insurance, garden services, repairs to the let area, security and levies as examples of permissible rental expenses. The invoice, the period it relates to and the use of the property matter as much as the label on the bank transaction.

The practical task is not to claim every property cost. It is to match each cost to the rental activity, apportion mixed private use fairly, and keep evidence showing why the amount belongs in the return. A deduction reduces rental profit. It does not create an automatic refund or make a capital improvement deductible.

What this means in practice

Start with gross rent actually received or accrued for the year of assessment, then build an expense schedule by property. Keep a separate column for costs that are wholly rental, wholly private, mixed, capital or still uncertain. If you rent out a room in your own home, a whole-house municipal account or bond-interest statement is not automatically a 100% rental expense. Use a rational apportionment based on the facts, such as the let area and period available for letting, and retain the calculation.

Bond interest is different from the capital amount you repay to the bank. The interest portion may be relevant where it is incurred to produce rental income. Your annual bank certificate, statements and loan schedule are better evidence than a rounded estimate. Similarly, an agent's commission for finding or managing a tenant should be supported by the agency statement and proof of payment.

Repairs restore an asset after damage or deterioration. SARS cautions that improvements are different: an improvement produces a better asset and is not an immediate deduction against rental income. A repair to water-damaged carpets in the let area is the example SARS gives. Rebuilding a kitchen to a higher specification may require a more careful capital-versus-repair assessment. Do not decide that question merely from the contractor's invoice description.

Step-by-step

List rent and costs for each property separately.

Record the property, tenant period, rent received or accrued and every supporting invoice. This prevents costs from one property being accidentally offset against another without an audit trail.

Split each bond payment.

Obtain the lender's evidence of interest and capital. Claiming the total debit as interest is a common error.

Identify the link to rental use.

Mark rates, levies, homeowner insurance, security, garden costs, agency fees and repairs according to whether they relate to the let area and rental period.

Apportion mixed-use amounts.

Explain the method in a short working paper. A private family area, periods of personal occupation and a room not available to tenants may require a reduced claim.

Separate repairs from improvements.

Keep photographs, quotations and invoices. Where the work makes the property better rather than restores it, keep the record for possible capital-gains-tax base-cost consideration instead of claiming it as a rental expense.

Complete the current ITR12 rental section.

Use the property-level fields in the current SARS guide and reconcile the total to the schedule. Review the assessment after submission.

Documents and records to keep

Lease agreements, rental statements and deposit records.
Bond statements showing interest separately from capital repayments.
Municipal, levy, insurance, security, garden, contractor and agency invoices.
Proof of payment and a property-level expense schedule.
Photographs and a short note where work may be a repair or improvement.

Important limits and exceptions

SARS says only expenditure incurred in producing rental income may be claimed. Capital and private expenditure is not allowed. Household-contents insurance and bond insurance are not the same as qualifying homeowner insurance. A vacant period, a property used partly by the owner, an unusually large repair, a related-party letting or a property held in a trust can change the result.

This article does not determine whether an activity is a trade, whether a loss is ring-fenced, or the capital-gains-tax treatment on sale. If the amount is material or the repair-versus-improvement distinction is unclear, obtain advice before filing.

When to get tailored advice

Get tailored help if the property is mixed-use, was bought or sold during the year, has a substantial renovation, is owned with another person, has foreign income, or produces a recurring loss. TaxProof can organise the rental schedule and source documents, while a tax adviser can review contentious deductibility.