South Africa Rental Income Tax Calculator
Calculate tax on your rental income after deducting allowable expenses like bond interest, levies, and repairs.
Annual Expenses
Rental income in South Africa is taxed at your marginal income tax rate, not at a separate rate.
You can deduct expenses incurred in the production of rental income, including bond interest (not capital repayments), levies, rates, insurance, and repairs.
Capital improvements (e.g., adding a room) are not deductible as expenses but reduce CGT when you sell.
If your rental expenses exceed your rental income, the loss can be offset against other income, subject to anti-avoidance rules.
How SARS taxes rental income and what expenses you can deduct
How is rental income taxed in South Africa?
Rental income is added to your other income and taxed at your marginal tax rate (18% to 45%). If you earn a R400,000 salary and receive R120,000 in annual rent, your total taxable income is R520,000 (before deductions). The rental income portion falls in your marginal bracket, which at this level is 36%. You must register as a provisional taxpayer if you earn rental income.
What expenses can I deduct from rental income?
Deductible expenses include bond interest (not capital repayments), property management fees, rates and taxes, insurance, repairs and maintenance, security costs, advertising for tenants, and body corporate levies. If your annual rent is R120,000 and expenses total R80,000, you only pay tax on R40,000 net rental profit.
Can I deduct the bond repayment from my rental income?
Only the interest portion of your bond repayment is deductible, not the capital repayment. On a R1.5 million bond at 11.75% interest, you might pay R15,000 per month but only R14,000 is interest (in the early years). The capital portion increases over time and the interest decreases. Check your bank statement for the split.
What about wear and tear on the building?
You cannot claim depreciation (wear and tear) on a residential property. However, you can claim wear and tear on movable assets provided with the rental — furniture, appliances, blinds, and carpets. SARS allows different rates: furniture at 16.67% per year (6 years), appliances at 16.67%, and electronic equipment at 33.33% per year (3 years).
Is there a difference between repairs and improvements?
Yes, and it matters for tax. Repairs maintain the property in its existing condition and are fully deductible in the year paid — fixing a broken geyser, repainting, or repairing a fence. Improvements add value or extend the life of the property — a new bathroom, adding a room, or installing solar panels. Improvements are capital costs and are not deductible (but reduce capital gains tax when you sell).
Do I need to pay VAT on rental income?
Residential rental income is exempt from VAT — you do not charge VAT on residential rent regardless of the amount. Commercial property rental is subject to VAT at 15% if you are VAT-registered. If your total taxable supplies (including commercial rent) exceed R1 million, you must register for VAT.
What if my rental property runs at a loss?
If your allowable expenses exceed your rental income, the loss can be set off against your other income (like salary). This is one advantage of property investment — the tax loss reduces your overall tax bill. However, SARS may scrutinise persistent losses. If you show rental losses year after year with no reasonable prospect of profit, SARS may disallow the deduction.
How do I declare rental income to SARS?
Report rental income on your ITR12 annual tax return. You must also register as a provisional taxpayer and make two provisional tax payments per year. Keep records of all income received and expenses paid for at least 5 years. SARS can cross-reference rental income with bond data from banks, so under-declaring is risky.
SARS-Aligned: Based on 2025 SARS rates and thresholds. For personal advice, speak to a qualified tax practitioner.
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Disclaimer: This calculator provides estimates based on current HMRC rates and thresholds for the 2025/26 tax year. It does not constitute professional tax, financial, or legal advice. Your actual liability may differ depending on your individual circumstances. Always consult a qualified accountant or tax adviser before making financial decisions. Read our terms