Demand-ranked tax questions · Individual · Question 16 of 20
How is rental income taxed in South Africa?
Rental income is added to an individual's other taxable income, reduced by permissible expenses incurred in producing that rental income. Rates and taxes, bond interest, agent fees, qualifying insurance, levies and repairs may be deductible. Improvements and private costs are not current rental deductions.
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The points that decide the answer
- A refundable rental deposit is generally not income when received, but can become income if later applied by the landlord.
- Repairs restore an asset; improvements create a better asset and are capital in nature.
- Costs must be apportioned when only part of a property is rented.
- Residential accommodation is generally VAT-exempt, so related input VAT is not deductible.
A practical way to handle it
- Reconcile gross rent, deposits and recoveries.
- Separate repairs, improvements and private costs.
- Apportion shared expenses on a reasonable basis.
- Retain a property schedule supporting the ITR12 figures.
Common mistakes
- Deducting the full bond payment instead of interest
- Treating renovations as repairs
- Omitting short-term rental platform income
What to keep on file
Lease, agent statements, bank records, municipal accounts, bond certificate, invoices and floor-area workings.
Source and scope
Based on current SARS guidance, reviewed on 28 August 2026. This is general information, not tax advice. Rates, thresholds and outcomes depend on the tax year and your facts. Regulated submissions and advice are handled through registered partners where required.
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