Rental Income Tax in South Africa — Declare the Gross, Claim the Trade

Declare the gross

Rental from fixed property is taxable. Put the full amount received on the return (commonly discussed under rental source codes on the ITR12). Agent commission does not make the net “what you earned” for disclosure — claim the commission as an expense if it was incurred in producing the rent.

Typical allowable expenses

Interest on a loan used to buy or improve that rental property (not the capital repayment). Rates, levies, insurance on the building, agent fees, advertising for tenants, repairs (not improvements — those are capital). A portion of electricity if the tenant does not pay it. Keep invoices. SARS added partnership expense lines on the 2026 ITR12 rental container — use them if you are actually in a partnership.

Losses and ring-fencing

Rental losses are not a lifestyle subsidy. Section 20A can ring-fence assessed losses from a suspect trade if you are in a high bracket. From years of assessment starting 1 March 2026, that ring-fence test uses a 39% marginal rate trigger, not only the 45% top rate. Do not build a “loss farm” on paper.

Selling the place

A disposal can trigger CGT. Primary-residence exclusion is a separate, strict test. If you signed the sale in February, the gain can fall in that year of assessment even if transfer is later. Budget 2026 FAQs are explicit on timing.

Questions

Is the bond repayment deductible?

The interest portion on a loan for that rental property can be. The capital repayment is not.

Must I register for provisional tax if I have rent?

Often yes, if rental and other non-PAYE income is material. Check the R30,000 / threshold tests.